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Australian sales at 15-year low

Sales of Australian wine are taking a battering at home and internationally, with exports being hardest hit.

Reasons for the downturn have been identified as oversupply, the global financial crisis, and until recently the strength of the Australian dollar.

Winemakers’ Federation of Australia CEO Stephen Strachan said oversupply had led to price wars in major markets, especially the UK.

The financial crisis had resulted in consumers reducing discretionary spending by drinking less or buying cheaper wine.

Domestically, surging sales of Sauvignon Blanc from New Zealand had done damage. The variety had helped boost imports by 52.3% during the 12 months to 30 November.

New Zealand Winegrowers data show that exports of Sauvignon Blanc to Australia increased from 17.8m litres in 2007 to 27.1m litres in 2008, and total more than 40% of all Australian imports.

‘Consumers are showing a very strong preference for it,’ Strachan said. ‘We’ve got some outstanding alternatives, some damned good products we’re offering, but it seems with not much success.’

Data from the Australian Wine and Brandy Corporation shows that in 2008 export volumes plunged 11% to 698m litres, the first fall since 1995.

Value was down 18% to AUS$2.5m in the first fall since current record keeping began 15 years ago.

All is not doom and gloom, according to some industry veterans.

In the Barossa, Peter Lehmann said in a press release that he saw the downturn as ‘another pendulum swing’ and is confident the Barossa will survive the crisis.

‘[It] is still the one regional name which is recognised worldwide. We still make the world’s most unique Shiraz and the best Rieslings from the Eden Valley.’

Strachan said that the only bright spot in the export figures was a 32.2% growth in value of sales to China, a result of less bulk sales and more bottled sales, making it the fifth most valuable market, the average price a litre jumping 58.2% to AUS$4.92.

Written by Chris Snow in Adelaide

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