COOL-CLIMATE GRAPES SUFFER MORE FROM AUSTRALIAN GLUT

Tasmania’s wine industry is feeling the negative effects of the grape glut due to an over-abundance of cool-climate grapes. Although Australian exports continue to rise, 80% are made up of cheaper warm-climate varieties. As quoted in The Mercury, Stuart Tasmanian Vineyards Association president Stuart Bryce said, "Therein lies the reason for the wine grape glut in the cooler growing regions. During the massive increase in exports, domestic market growth has been modest, so a build-up in wine stocks was inevitable."

Small, Tasmanian wineries cannot afford to lower prices in order to generate cash flow unlike large wine-producers. "If we drop our prices, we go broke. Additionally, that would also effectively be revaluing our brands. If you take a well-known $25 bottle of wine and start selling it for $20 just for cashflow, you can never realistically expect to sell it at $25 again," says Stuart. However, selling cleanskins – wines with labels that do not identify the vineyard – could help protect the wineries without hurting brands. "Selling cleanskins means you're not revaluing your own brand, but you have that cashflow," he said. The Tasmanian industry is already working on marketing strategies to help them make it through the glut and soften its effects.