Aussie winemakers struggling to make a profit

Australian winemakers are struggling to make a profit, with 85% of growers reported to be unable to meet or exceed their production costs this year.

As reported by ABC Online, the news comes from a 2015 vintage report published last Friday by the Winemaker’s Federation of Australia.

The situation is particularly dire in the Hunter Valley in New South Wales, where 94% of growers are in the red.

“Prices in the warm inland regions are varying season to season off a very low base and we’re not seeing a structural uplift in those prices,” the federation’s chief executive Paul Evans said.

“What we need to do is grow demand for wine globally and you’ll see benefits flow through to all parts of the supply chain including grape growers,” he added.

Evans stressed the importance of promoting Australian wine in America as a solution to the problem via a multi-million dollar marketing campaign. He said the a proposal had been put to the Australian government to help fund the project.

The situation is very different in Tasmania, where 99% of growers are making a profit, while 57% of growers in the Barossa Valley are in the black.

Across Australia, the 2015 vintage is up in volume by 0.4% on a year ago at 1.67 million tonnes but is still below the eight-year average of 1.7 million tonnes.

Grape prices have risen by an average of 5% over the last year with Shiraz remaining the most widely planted grape in the country followed by Chardonnay and Cabernet Sauvignon.