Jim Caddy, chair of the Inland Wine Regions Alliance, responds to recent comments in WBM and The Week That Was about the state of the Australian wine industry.
It appears that many are happy to have a go at some wine industry organisations, but do not appear to be putting forward constructive alternatives.
While I am the first to agree that the organisations have some failings, we have to ask whether it is their fault or ours for not being active participants in discussions with these organisations.
When two of the major organisations announced that they wish to consult in regard to a ‘One Sector Plan’ for the industry, we have seen some criticism instead of using it as an opportunity to have a say.
The process will be used by Wine Australia to formulate their next five-year plan which is a legislated requirement for continued government co-funding.
I can also assure you and anyone else who is concerned that there is a lot of ‘sturdy dialogue’ going on in the three inland regions of the Riverina, Murray Valley and Riverland (which represent around 75 percent of our sector’s production) with their industry bodies leading the way.
Just because organisations or growers don’t shout it from the rooftops or publish it in social media, does not mean it is not happening.
Interestingly the ‘dashboard’ that was derided on social media recently was the response to a recommendation from the ACCC’s extensive consultation with inland region growers in regard to better market information so they can make sound financial and business decisions.
Perhaps encouragement to look at the current dashboards made available to us by Wine Australia and paid for by our levies might do more to give us a better insight into what is really happening in the market rather than criticising and looking for someone to blame.
Growers need to be wary of some of the projections for growth and instead look at the real numbers.
As an example, the recent hype regarding alternative varieties needs to be put in perspective.
A quick look at the export dashboard will show quite a strong correlation between an increase in volume and a lower value/litre and likewise the other way around for alternative varieties.
This would suggest that the market may be limited and it will not take much to be in an oversupply situation.
While I am sure we can do better in Singapore as you suggest, the market is not big enough to solve our current problems.
The total still wine imported from all countries into Singapore (source: World Wine Atlas) equals about 30,000 tonnes equivalent, of which Australia has a 40 percent share compared to France with a 20 percent share.
Perhaps there may be some growth opportunity in the sparkling category accounting for about 15,000 tonnes where France holds 87 percent share and Australia has the next best at six percent.
Our industry is in a difficult situation and given the apparent decline in world wine consumption, doing what we have always done won’t work.
We need to be making wine which suits the consumer palate and is better than that of our competitors as judged by the consumer and not by what winemakers think is good.
We will almost certainly have to reduce production in many regions so that it is in line with declining demand.
Currently, our total sales are the equivalent of around 1.5 million tonnes, while our average crush is closer to 1.8 million tonnes.
We need an industry where the premium sector and the commercial sector complement each other and do not compete for limited resources.
While we are all probably a bit cynical about five/10 year planning, it is good opportunity for industry participants to talk to their local industry organisations and have an opportunity to be heard in the consultation period.
I am sure that all elements of the One Sector Plan will not suit everyone, but we are a diverse industry and it is unrealistic to expect that there will be a ‘one size fits all’ solution.
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Interesting comment Jim about marketing alternative varieties. I think Prof Kym Anderson should be commissioned to write forward plans. He is very balanced.