SA wine industry labelled as lazy

Professor Goran Roos, a world expert in manufacturing innovation, is South Australia's 20th Thinker in Residence. Picture: Dean Martin
Source: The Advertiser

AUSTRALIA'S wine industry is "lazy" and lost its innovative edge, SA's outgoing Thinker in Residence says.

Professor Goran Roos said the industry was one of a number at risk of global competition, along with printing, which had been protected from international competition until recently.

China and India were the likely sources of future competition based solely on the strength of numbers.

Recent studies found 27 per cent of Chinese and Indian firms were better managed than half of Australian firms - leaving this half at risk of collapse in the face of more capable overseas competition, Professor Roos said.

He said Australia's wine sector was in the firing line because it had failed to keep up the pace of reform and growth it set in the 1990s.

"They have all kinds of excuses because the world is difficult, there is a strong dollar, there is a glut," he said.

"But the rest of the world has taken notice and adopted the Australian innovations  ... France has adopted Australian technology, the Spanish are coming in and South African winemakers are competing on low price. "The industry has ... squandered a lot of time."

Professor Roos will soon deliver his report to the State Government with 40 recommendations for improvement of South Australia's manufacturing sector, including setting up an automotive cluster to help companies work together.

The wine industry need not collapse, he said, as "a near death experience is a good thing if you survive it".

Winemakers' Federation of Australia chief executive Stephen Strachan said Professor Roos' observations were "a bit naive". He admitted the industry engaged in overplanting in the 1990s on a "false expectation of market opportunities" and was suffering lower prices as a result.

Mr Strachan said Australian winemakers were continuing to innovate.

"Companies across Australia are developing new products and styles and there is a lot going on. The problem is it is not yet being displayed in the market, and it won't for another two or three years," he said.

"Even though there is an oversupply, there is still a lot of innovation. We are just not seeing that translate into the robust growth we saw in the 1990s. In time we will reap the benefits but it is going to take a while."

Meanwhile, in his assessment of manufacturing, Mr Roos said employees should be paid more to ensure the local industry survives "the perfect storm".

But he warned that there was doom in store for companies that "probably shouldn't be there" as they try to compete on price in a high-cost environment.