A leading academic has claimed Australia needs to reduce its vineyard area by as much as 30%.
Speaking at the fifth Academy of Wine Business Research conference, Professor Larry Lockshin of South Australia University said the Australian wine industry ‘must remove’ 20-30% of its plantings if it wanted to achieve supply-demand balance.
The claim follows a report by industry body, the Winemakers’ Federation of Australia, which admitted the industry is producing 20 to 40m cases more than it is selling and ‘at least 17% of vineyard capacity is uneconomic’.
While inland bulk-producing areas have been hardest hit, Lockshin told decanter.com ‘Even in the Barossa, if your grapes are not being bought by the top-end producers, there’s not much chance of making a decent living. It’s death by attrition.’
He predicted growers and managed investment scheme vineyard owners would start abandoning vineyards, lacking the money to replant alternative varieties or different crops.
He also claimed Australia was in danger of making the same mistake of selling at low cost in new markets and damaging its reputation in the long-term, as seen in the UK and US. ‘The issue is if 90% of your wines on the shelf sell under a price that cheapens your image.
‘We are in China and doing quite well in top restaurants but in the lower end shops we are also seeing cheap wines from Australia. It will be hard to change that low-cost image.’
Written by Rebecca Gibb