news.com.au - Wine-lovers to benefit from hard hit WA wineries

[g8crasher]

Wine-lovers to benefit from hard hit WA wineries

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Linda Cann

April 29, 2009 09:00am

IT'S shaping as a good year for wine connoisseurs, as WA wineries offer bargains on premium drops to survive consumer belt-tightening.

Higher-priced wine sales took a hit last year as the Australian dollar approached parity with the US dollar, reducing export margins, and now the global recession has dried up markets across the world.

There had been a significant decrease in sales and WA wineries were under a lot of pressure, according to Wine Industry Association of WA president John Griffiths.

“Before the recession, our dollar hit parity with the US, which is a major market, so our wines were bad value compared to American wines and other imported wines,” Mr Griffiths said.

WA wineries were particularly affected by the recession because they tended to produce premium wines, which were being shunned by consumers spending less on discretionary items.

General manager of Plantagenet Wines, Ian Mayo, said the impact of the recession was so severe because of its global nature.

“We’re a mid-size winery that sells about 50 per cent in Australia and 50 per cent overseas so the recession has affected us on all levels.

“Because the recession is global, we have limited places to go. The major markets – the US and UK – have the most effect on us.”

“Sales have declined significantly, by about 10 – 15 per cent in the higher end.”

“People are trading down – they’re spending money but are buying a $12 bottle instead of a $20 bottle. The impact is harder in WA than other states because we specialise in higher priced wines.”

“At the end of the day, wine is a discretionary spend, and in tougher times people are more careful with their spare money because they don’t know what will happen in the future.”

“But you cant just sit back and watch the market slide away, so most wineries are offering good incentives to their mailing lists to encourage people to buy direct.”

Mr Mayo said wineries were also slowing production in order to lower input costs and stay sustainable.

“It’s started this year with the 2009 vintage, which has cut back about 15 per cent of intake. There’s no use having whole tanks still sitting there in 12 months.

“A lot of mid-size wineries made that decision late last year.”

Wineries were expecting sales to start recovering in 2010, according to Mr Mayo.

“We’re looking ahead and planning for 2010 when we expect there to be a gentle improvement.”

Mr Mayo said there had been some consolidation of wineries recently, but he expected most WA wineries to survive the downturn because most were family-run.

[Guest TuMMyBeaR]

Excellent! Time to go vineyard shopping....

[Guest Cklasse]

Are wine from WA any cheaper here? I kind of like Houton red.

[Guest TuMMyBeaR]

Actually I like a certain label called 8 vineyard from Victoria....

Cheap and good.... :thumbsup:

[g8crasher]

Since they've announced production cuts on the 2009 vintage... and if this year's reports on the wines turn out to be "exceptional" in terms of marketing... hehehe can make moolah leh.

[Guest narmi]

I think time to invest in some grange wines lah!!

[g8crasher]

Hahahaha grange wines are quite overpriced leh.. possibly over rated??!