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Oz yields likely to be down 20%

Published:  23 July, 2008

The 2007 vintage in Australia is likely to produce 20% lower yields than average - a reduction of half a million tonnes of grapes on 2006.

The small yield is expected after reduced rain, frost damage and low water allocations led to smaller bunch sizes.

Regardless of the effect on winery profits, the Australian Wine and Brandy Corporation is putting a positive spin on the apparent lack of wine stocks, claiming that a much-needed reduction would provide some relief from recent downward pressure on wine prices'.

By 2010, there would be 460 million litres more than is needed for supply, if pre-2007 trends continue, the Corporation estimates.

But whatever the size of the harvest, estimated at 1.65 million in 2007, price reductions are likely to continue thanks to strong competition from the rest of the New World. Exports by volume are predicted to decline to a growth rate of 5% in 2011. This compares to a growth of 18% in 2000-01.

According to the corporation's information and analysis manager Lawrie Stanford, innovation will be required from Australian winemakers in opening new markets, new packaging developments or new wine styles. The period will be characterised by a transition from a past of strong, relatively easy growth to more constrained growth requiring development of targeted opportunities'. Stanford implied that growers will have to change the varietal mix to meet changing consumer tastes and that despite the move to higher-quality wines from specific vineyard sites, cooler-climate production remains high, relative to the market opportunity'.