Fed: Australian wine enters the marketing decade

AAP General News (Australia)
12-27-2000
Fed: Australian wine enters the marketing decade

By Steve Larkin

ADELAIDE, AAP - Australia's wine industry has always been ambitious, but never more
so than this year.

In a country where each adult is estimated to consume 19.3 litres of wine a year, the
industry has switched focus to ensure it capitalises on recent stunning success.

Master plans were formulated this year with an aim of annual wine sales topping $5
billion by 2010.

Forecasts were also made of wine grape production rising 30 per cent within two years,
and export sales are predicted to increase to $3.4 billion from the current $1.4 billion
by 2010.

Industry experts say Australia's love affair with red wine will continue to form the
platform for industry growth, to such an extent shiraz will overtake chardonnay as the
country's favourite wine.

The Australian Bureau of Agricultural and Resource Economics (ABARE) predicts chardonnay
will fall to third favoured, behind also cabernet sauvignon.

According to ABARE executive director Vivek Tulpule, a record wine grape harvest of
1.3 million tonnes will be witnessed in 2000-01, up 14 per cent over the previous season.

Red grape production is forecast to rise 22 per cent, contrasted to an expected one
per cent increase in chardonnay plantings.

ABARE says wine exports will continue strong performance and by the end of next year
more Australian wine will be exported than consumed locally.

Almost half of Australia's wine exports will go to the United Kingdom, while the US,
Canada and Germany are expected to increase their imports substantially.

In other forecasts, ABARE predicts burgeoning Western Australia to expand its vineyards
by 34 per cent.

South Australia continues to be the major producer of wine, with up to 24 per cent
of the nation's vineyards ahead of Victoria and New South Wales each with about 12 per
cent.

With the stunning industry growth comes competition.

As Australian wines continue to gain popularity on domestic and global markets, a spate
of mergers and acquisitions has occurred.

Foster's Brewing Group Ltd made a $2 billion acquisition of US wine producer Beringer.

Foster's now expects wine to contribute 40 per cent of its overall profits within the
next five years, compared with its current 10 per cent.

The company also plans to boost the proportion of its exports to its earnings to 40
per cent from the current 10 per cent.

Foster's said the acquisition of Beringer was to enhance the company into a "global
premium branded beverage company", and other Australian companies are also looking overseas.

With an increasing number of companies focusing on exports, analysts believe exports
of wine during the year to June 2001 are bound to outstrip the previous year's record
export earnings of $1.4 billion.

To capitalise on the success, a comprehensive strategy entitled The Marketing Decade
was launched for the industry at this year's Wine Industry Outlook conference in Melbourne.

The plan sets an overall target of $5 billion in annual wine sales by 2010.

AAP sl/apm/de

KEYWORD: YEARENDER WINE

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