Australia Yarra Valley
Australia Yarra Valley
(Image credit: Australia Yarra Valley)

Several inland Australian wine regions are almost entirely unprofitable, according to analysis by the country's winemaker federation that highlights a gulf in earnings between areas.

More than 90% of production in Australian wine regions including Hunter Valley, Riverland and Swan District is unprofitable, said the Winemakers Federation of Australia (WFA) this week.

But its report also points to a two-speed Australian wine sector, with wine production in cooler climate regions much more profitable; albeit 43% of cool climate production is still loss making, according to WFA figures.

‘Many producers in the warm inland regions in particular continue to experience enormous challenges,’ said WFA chief executive Paul Evans. ‘Our analysis shows that 92% of production in warm inland areas is unprofitable.’

Conditions in some areas have also improved in recent years. Only 28% of Barossa wine production is loss making, versus 50% three years ago.

Evans said it was positive that grape prices across Australia have risen by 5% in the past year, albeit off a low base. He said Australia’s new free trade agreements with several Asian countries, including China, helped to provide a ‘window of oppotunity’ for growers.

‘We must urgently seize the potential to grow demand for Australian wine and help address the on-going structural mismatch between supply and demand at profitable price points,’ he said.

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Chris Mercer
Chris Mercer

Chris Mercer is a Bristol-based freelance editor and journalist who spent nearly four years as digital editor of Decanter.com, having previously been Decanter’s news editor across online and print.

He has written about, and reported on, the wine and food sectors for more than 10 years for both consumer and trade media.

Chris first became interested in the wine world while living in Languedoc-Roussillon after completing a journalism Masters in the UK. These days, his love of wine commonly tests his budgeting skills.

Beyond wine, Chris also has an MSc in food policy and has a particular interest in sustainability issues. He has also been a food judge at the UK’s Great Taste Awards.