Australian wine industry past ‘golden age’
The traditional wine company model is not sustainable and the Australian wine industry needs to do more to combat the fact it is past the golden age, says Dane Hudson, chief executive of Australian Vintage.
“The bottom line is that the Australian wine industry is facing a new stark reality, the old golden age has well and truly gone. Our company however is now in shape for the next chapter of the industry,” he said.
Australian Vintage, which owns brands such as McGuigan and Tempus Two, recently posted a $123.6 million annual loss on the Australian Stock Exchange. Despite the results, Hudson claimed it had outperformed the industry with improved sales, strong cash flow and reduced debt.
“Total sales for the year were up nine percent, bucking the industry trend that saw Australian wine sales steady and export sales value down 10 percent,” he said. “AVG’s export branded sales were up eight percent with growth in every market except New Zealand.”
Hudson believes the industry has an oversupply of grapes and too much winery capacity to be sustainable.
“Lower demand, lower prices, the global financial crisis and a high dollar are exacerbating the issues,” he remarked. “If the industry doesn’t want to change, the new reality will transform it anyway.”
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