Red, white coup as wine co-op targets Asian market

They have signed up for a program that is promising to deliver economies of scale by bringing together more than 2000 wineries to take on Singapore.

The Wine Export Initiative Limited is the brainchild of Sydney entrepreneur David Elliott.

After years in the printing industry, Mr Elliott could see that local businesses could not compete against cheaper international printing.

He got together a co-operative of printers who invested in state-of-the-art machinery that was used around-the-clock to increase efficiencies, and services and create economies of scale.

"I had been involved in other business co-operatives and was looking to find another industry that needed some of that culture of working together," he said.

Sydney-based Mr Elliott said wine was an obvious choice. He said smaller wine growers were often too busy pruning vines and marketing to concentrate on the bigger export picture.

Mr Elliott said wineries were signing up for the WEXI model because it allowed them to try exporting without the time and effort.

They sign-up for two years and pay an administration fee that works out at $720 per pallet per month.

Mr Elliott said the wine would be available retail, wholesale and online to the Singaporean market.

He said the plan was taking "baby steps" but with tens of thousands of expats and a highly affluent local population, with an increasing appreciation of wine, there were huge opportunities. While WEXI is not affiliated with Austrade, those participating may be eligible for marketing export grants of up to 50 per cent, he said.

He said it was hoped that WEXI would extend to other Asian countries.

WEXI is on the Australian Small Scale Offerings Board.

 THE high Australian dollar continues to heap pressure on the wine industry, according to new industry research.

But many exporters, faced with pressure on their margins in Europe and the US, are responding by increasing prices and improving their marketing.

The Rabobank report finds that 2012 will be crucial for the industry, with the worldwide wine glut likely to ease.

European winemakers are expected to cut production as subsidies handed to the distillation and grape-growing industries cease in July.

The report forecasts US production will fall 9 per cent in 2012 and European production 2 per cent, with declines in Italy and Spain.