Australia BUSINESS

Question 1

Describe the export boom of the 80s and the subsequent decline.

Describe factors driving both.

Answer 1

Boom

• became world’s 5th largest exporter
• 1. Varietal labelling + including taste descriptors
• 2. Ripe, approachable styles
• Plantings rose

Re-adjustments

• Plantings fell
• 1. Global oversupply - many copying style
• 2. Strong Aussie dollar
• 3. Series of droughts increased cost of irrigation
• → vine pull + refocus on smaller/Q production

Question 2

What portion of producers are small?

What % of exports do the five largest companies account for?

Answer 2

80% of producers crushed fewer than 250 tonnes of grapes

Top 5 export 87% by vol

Question 3

How is Wine Australia funded and what does it do?

Answer 3

Funded by levy on growers, aims to promote Australian wine domestically and abroad

Question 4

How important are exports to Australia’s wine industry?

Where are Australia’s largest markets?

Which export market is growing fastest?

Answer 4

Very - accounts for 2/3 of sales

UK, China, US, Canada and Germany are main markets

China - volume sales dipping but value growing HOWEVER trade dispute in 2020 has jeopardised this growth

Question 5

What role does DTC and cellar door play in Australia?

Answer 5

• Cellar Door - 2/3 of wineries have a cellar door, up to 80% in Tasmania
• Wine tourism raises profile of individual regions, increased margins, helps cash flow
• Online shops have helped even isolated regions benefit from DTC

Question 6

What are the opportunities and challenges in selling wines made from uncommon grape varieties?

Answer 6

Heat tolerance varieties have become increasingly popular

+ Diversification makes demand resilient to changing tastes

+ USP compared to other New World markets that also sell int’l varieties

• Competition from producers growing these grapes in more famous origin regions
• Small production volumes mean high prices (for now)