Cheap wine leads growth

AUSTRALIA'S vineyards need to be reduced in size but unique and potentially higher-value vines must be maintained, according to Nuffield scholar Matt Munzberg.

Mr Munzberg, who owns a winery in the Barossa Valley, says in his report, Regional branding and marketing as a tool for improving returns to agricultural producers, that most of the growth in Australia's export wine market has been at the bottom end of the market.

"Australia's warm irrigated inland areas are where most of the wine comes from that is sold in the sub-$5 a bottle price range," Mr Munzberg said.

"Planting in the cooler regions has mostly been done without a corresponding increase in the market for these more expensive products . . . we currently have a glut of premium wine."

Regional marketing plans could help wineries to be better rewarded for their efforts, according to the report.

Wine Australia's "Regional Heroes" campaign was a step in the right direction, Mr Munzberg said.

"Regional branding is a relatively easy message for consumers to understand . . . if marketed well, these brands can be a very effective means of producing higher returns for almost any primary product," he said.

Mr Munzberg also said the Barossa's reputation had been achieved "largely by accident, with virtually no generic co-ordinated marketing campaigns".

The report also warns the proliferation of bottom-end wine could contribute to mass-production wineries taking over family-owned operations, which contribute greatly to the appeal of many famous wine regions.