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The five bottlenecks faced by wine manufacturers

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IBISWorld has released its Wine Manufacturing in Australia 2012-13 report which lists five key inhibitors to growth and success in the industry, as well as annual growth statistics and trends.  

The report states that the past five years has seen volatile economies in key export markets such as the US and UK demonstrate a sharp decline in demand due to the recession. 

Oversupply of wine and wine grapes was listed as the most challenging issue faced by the industry in recent years. According to the research, at least 20 percent of bearing vines in Australia are surplus to requirements and at least 17 percent of vineyard capacity is uneconomic, resulting in

Australia producing 20 million to 40 million cases a year more than it is selling.  

The high Australian dollar contributed to an annual decline in exports sales of 9.7 percent over five years through to 2013, while rising competition from new low-cost wine producers over the past decade saw several new producers enter the market from countries including New Zealand,
Argentina, Chile and South America.  

The increasing dominance of the supermarket giants has equated to Coles and Woolworths holding a 60 percent share on the alcohol retailing market. This is expected to increase as both supermarkets have plans to open another 270 stores within the next two years.  

The report also revealed that annual growth from 2008-13 has dropped by 3.2 percent and is due to rise by 1.1 percent throughout 2013-18, and revenue for 2012-13 sits at $5.3b, with a profit of $273.9m. 

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