Vic: Wine export earning surpass wheat crop

AAP General News (Australia)
08-13-2004
Vic: Wine export earning surpass wheat crop

By Alex Wilson

MELBOURNE, Aug 13 AAP - Wine exports from Victoria hit a record $435 million in the
last financial year and are now worth more to the state's economy than wheat exports.

But wine industry figures show a glut of grapes and the strong Aussie dollar mean many
grape growers and winemakers are still doing it tough.

Ten years ago the wine industry was a minnow ranked number 41 on the list of the state's
top export earners.

Today it is ranked 12th and Victorian Treasurer John Brumby said the success story
looked set to continue.

"Our wine producers are now gaining a real foothold in markets all over the world,
which not only demonstrates their quality but their competitiveness in the international
marketplace," he said.

Overall exports grew by more than a quarter in the last financial year with exports
to the US growing 13 per cent to $158 million and exports to Canada growing 32 per cent
to $58.8 million.

But the chief executive of the Victorian Wine Industry Association Mark McKenzie said
despite the export growth there was still downward pressure on prices.

"We have overdone the planting, predominantly in the premium districts, to be honest," he said.

"Our major areas of concern at the moment would be Cabernet, Merlot to some extent
and certainly Pinot Noir."

The explosion in vine planting had now come to a halt and if exports continued to expand
grape growers who could ride out two or three rough years would be all right, he said.

Mr McKenzie said the strengthening Australian dollar had also hurt grape growers with
big wine exporters looking for good quality grapes at cheaper prices so they could maintain
their prices to remain competitive overseas, he said.

The growth of wine sales at a few major Australian retail chains had also put intense
pressure on smaller winemakers, some of whom were now bailing out, he said.

"A number of people have come into the industry in the last decade with very rose-coloured
glasses," he said.

"It's not like any other primary industry. You have to be very patient and you have
to run the business well - there are no easy profits to be made for small wineries."

AAP apw/dk/cjh/de

KEYWORD: WINE (PIX AVAILABLE)

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