|
A Technical Guide for Wine Producers
|
|
RECENT ARTICLES | WYNBOER HOME
VinPro(SA) Bulletin
Shift in median prices of bulk wine sales
While the median price at which all red wine is sold, has increased even more since 1999, that of white wine has decreased. Compared to 1999 a bigger percentage of red wine was sold in the higher price bands, while a higher percentage of white wine was sold in lower price bands.
From January to October 2000 the biggest percentage yet, namely 68% of premium bulk red wines, sold for between 700c and 1 000c per litre, compared to 53% in 1999. Non-premium red wines indicate the same trend.
Chardonnay and non-premium white wines, on the other hand, display a further negative trend, with wines comparable in quality to that of the previous year now selling at lower price bands.
The effect of unsold white wine stocks on the distribution of sales among the various price classes of bulk white wine can be clearly observed in the accompanying figures. Thus it can be seen that, while sales were still divided normally among the various price classes in 1998, with the highest percentage sold in the price class R1,50 to R2,00, this division became slightly distorted until the biggest percentage sold below R1,25 in 2000.
This distortion of bulk wine prices may be prevented by producing only wines for which a market already exists. This will result in a price increase throughout the spectrum.
An overview of the Australian wine industry (Part II)
In 1999 Australia pressed a record crop of 1 125 840 tons of fresh grapes. This is 15% higher than the 1998 pressing season. The average yield for the industry amounted to 13,3 tons per hectare.
Of the total crop 1 076 207 tons of grapes were delivered as wine grapes for making wine. The total volume of good wine produced in 1999 amounted to 811,4 million litres, 17% more than the 1998 crop. On the other hand, distilling wine production decreased by 6% to 57,8 million litres. The production of brandy amounted to a constant 0,8 million litres AA.
As far as 2000 is concerned, unit productions decreased by as much as 30% due to negative climatic conditions in critical stages. In a few instances crops decreased by as much as 50% compared to 1999. However, the increase in the percentage of bearing vineyards between 1999 and 2000 could neutralise this decrease in unit productions and prevent a decrease in total production in 2000.
Domestic sales
Domestic sales of wine have increased by 13% since 1992. In 1998/99 this amounted to 348,3 million litres, 3% more than the previous highest figure.
The per capita consumption of wine in Australia increased sevenfold over a 50 year period, from an average of 3 litres per capita per annum in the late 1930s to 20 litres per capita since the late 1980s. Domestic sales of brandy, however, show a constant decrease to 0,9 million litres of alcohol in 1999.
Exports
Wine exports amounted to a record 215,5 million litres ($1,068 billion) in 1998/99, 12% higher than the previous year. In the past decade, the volume exported increased dramatically from 39 million litres in 1988/89. This represents an increase of more than 400%. The value of wine exported also continued to increase, notably by 22% compared with the previous year. The average value of the exports in 1998/99 was $4,96 per litre compared to $4,54 in 1997/98.
Australia's most important export destination is still the United Kingdom, with 48% of all exports in 1998/99. The USA was the second biggest export market at 17%, while 10% was exported to New Zealand. Almost all the export markets show an increase compared to the previous year, with the exception of Japan which shows a decrease of 11%.
Imports
Wine imports, used as a mechanism to maintain a balance between production, domestic sales and exports, decreased by 5% to 24,3 million litres in 1998/99. These imports still indicate that the success of the export market results in a shortage in the domestic supply of wine, which is then supplemented by imports. While France and Italy maintained constant levels of exports to their established markets in Australia, countries such as Spain, and this year for the first time South Africa, provided lower price category wines for blending with Australian produced wines intended for soft packs.
South African exports to Australia increased from 95 000 litres in 1997/98 to 5,4 million litres in 1998/99. This makes South Africa the third biggest exporter of wine to Australia based on volume, after Spain and Italy. The price at which French wine was imported by Australia averaged $14,21, compared to Spain's $1,35 and SA's $0,56.
Available stocks
For the first time in history wine stocks at wine cellars exceeded 1 billion litres in 1999. The assumption may be made that these wines were probably contracted. Red/ros‚ stocks increased by 33% or 118,4 million litres to make this category the biggest cause of the total increase in stocks. The most likely reason is the maturation period of these wines.
Stocks increased despite increased domestic and foreign sales of wine in 1998/99 due to the record level of wine production in 1999.
Historic pricing trends
While the prices paid for wine grapes are still increasing, the trend has been decreasing since the peak in 1994. The average grape prices for the 1999 crop increased by only 3%, while they increased by 90% over the past 9 years. Expectations are that prices have peaked and that 2000 may even have noted a slight decrease.
Prices obtained by wine cellars have also showed constant growth over the last few years, but in 1998/99 wholesale prices of wine decreased by 1,2% on average. This is in contrast with retail prices of wine that increased by 1,3% in 1998/99.
Export prices of wine also increased by 10% in 1998/99, compared to an increase of 12% the previous year.
Focussed wine industry
The Australian wine industry is focussed and geared to challenge any competition in the global market. The structure and logistical systems of the Australian wine industry are such that the flow of information and communication may occur optimally, which is important for the regulation and adaptability of the industry.
Australia benefits from the enormous advantage of economies of scale, which means that it may produce very good quality wine at lower costs, giving it a competitive advantage over its opponents. It is also aware of the difference between functional and aesthetic design when it comes to the construction of cellars, which has further implications for reduced costs.
Australia's biggest asset is surely the fact that it avails of formidable leaders, such as the four large companies that also promote the wine industry's image.
- Paiter Botha
|
|
Wynboer is incorporated in WineLand, magazine of the SA wine producers.
Visit our sister sites:
|
| UP |
COPYRIGHT (C) 2000 WineLand |