Production

Question 1

Production

how many h/l produced?

What % is exported?

Who imports the most?

how much is consumed locally?

Any restrictions on who you can sell to?

what is the % of tax

how many wineries produce 80% of wine

List the key producers: (5) plus 2 brand names for each

Answer 1

15m hl of wine produced

Exports represent 60% of the production with

1. Australia main import in the UK with 20% of imports
2. More than half of Australian exports

• Local market is the main destination market with 40% consumed domestically Winemakers allowed to sell to whoever and wherever they want.
• 40% domestic tax on wine
• 10 biggest wineries produce 80% of the wine

Key producers:

Treasury Wine estates (Lindemans, Penfolds)

• Part of Foster’s group until 2011 when the brewing and wine division of the company were split.
• Owns & manages 12,000ha w sales of 35m cases worldwide
• Key brands include:

1. Wolf Blass: created in 66 by German immigrant Wolfgang Blass
2. Penfolds: founded in 1884 by English physician Christopher Penfold; vineyards in Adelaide (where founded), the Barossa & Eden valleys, Mc Laren Vale and Coonwarra. Heartland remains in Barossa where wines e.g. the Grange range are full bodied, w ripe, rich sweet fruit and hi rounded tannins
3. Lindeman’s: founded in 1843 by Henry Lindeman who planted vines in the Hunter valley. Famous Bin65 Chardonnay was praised by Parker in the Wine Advocate.

• *Accolade wines ex Constellation Wines Australia (Hardy’s Banrock Station)**- Constellation divested 80% of the company to Champ in 2011.
• # 1 in volume in the UK and Australia via key brands Banrock, Hardy’s.

Orlando wines / Pernod Ricard Australia (Jacob’s Creek)

1. Founded in 1847 by Johann Gramp when he set up vines in the Jacob’s creek.
2. Jacob’s creek is now exported to over 60 countries

Casella wines (Yellow Tail, Black Stump)

1. Owned by the Casella family; one of the largest wine companies in both sales & wine in Australia - Processed 124,000 tons of fruit in 2008
2. Yellow Tail was created in 2000 and was the #1 imported wine in the US by 2003
3. Most grapes sourced from Riverina

• *McGuigan Simeon**
• Plc led by Brian Mc Guigan; ambitious & dynamic company

Question 2

List Strengths

1.

2.

3.

4.

5.

6.

Answer 2

Strengths

(+) Market-led industry with adaptable vineyards (top-grafted vines) and wineries
(+) Competitive and recognisable quality brands all across the world (i.e. critical mass)

(+) Variety labelled wines and demystified marketing
(+) Flexible GI system / South eastern super zone -> simpler for producers
(+) Great quality potential from a lot of different
(+) Access to international expertise (flying winemakers)

Question 3

List Weaknesses

1.

2.

3.

Answer 3

Weaknesses

(-) Lack of understanding of terroir; irrelevant grape varieties (-) Confusing GI system for consumers w no guarantee on production methods etc.
(-) Relative low quality image

(-) Small & static dynamic market -> reliance on exports of cheap bulk wines with limited margin

Question 4

Opportunities

1.

Answer 4

Opportunities

[O] Untapped potential from new regions such as Canberra District

Question 5

List Threats

1.

2.

3.

4.

Answer 5

Threats

Climate change (instability, severe frosts, droughts & bush fires)
EU new wine laws on table wines
Global demand

Change in Politics, ie, China