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Worst annual wine sales on record, but WA still raises a celebratory glass-11August26

Courtney Trenwith

Australians may be drinking less wine but their taste for the tipple is becoming more expensive, the latest sales figures suggest.
In further evidence that the wine industry is experiencing its worst period in two decades, total sales declined a further 2.4 per cent in the year to June and recorded the first decline in annual sales on record, according to the Australian Bureau of Statistics.
Domestic wine sales have now recorded a fourth straight quarter of decline – the most protracted period of weakness in 15 years, according to CommSec.
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However, the WA Wine Industry Association is willing to raise at least one celebratory cheer, highlighting the decline in the volume of imports and an increasing preference for bottled wine over cheaper casks, which it says is good news for WA wine producers.
A global oversupply of wine coupled with the higher Australian dollar has seen international wines infiltrate the Australian market at more competitive prices than traditionally, putting added pressure on local producers.
But the trend appears to be declining with the volume of imports falling 5.1 per cent in the June quarter, compared to the same period last year.
While imports accounted for a record 14.8 per cent of total wine sales during the March quarter, their slice of the market shrunk in the following three months to 12.8 per cent, although that remains double the level of five years ago.
Australians are choosing more top of the line international varieties – particularly French champagne – with the value of imports rising 4 per cent to an average $7.25 per litre, compared to $6.62 per litre a year earlier.
WA Wine Industry Association general manager Amyee Mastaglia said the figures were reasonably good news for WA producers, who in general sold at the premium price points.
WA produced 4 per cent of the nation’s wine but accounted for about 20 per cent of premium varieties, she said.
“What these trends are telling me is that the consumer is being choosy about where they are spending their dollars on wine, but when the choice is made they are going for more the premium end of the scale,” Ms Mastaglia said.
“Wine drinkers were being more prudent in their choice of wines [in the June] quarter – perhaps consuming a little less, however making it count when they do decide to have some wine.”
The industry nationwide is counting its grapes that the figures were not worse considering the general downturn in consumer spending.
Wine Federation Association chief executive officer Stephen Strachan said poor sales reflected the flat retail sector in general.
However, the wine industry was recovering from an oversupply issue that had pushed down prices. He said some vineyards were beginning to see price increases.
“We’re seeing some positive signs but there’s still a lot of major structural issues in the industry,” he said.
“It’s reassuring to see that consumers are probably trading up a bit.
“WA and the Margaret River are typically premium products and their interest lies in consumers prepared to spend more on a bottle of wine. In that sense [the latest figures] are probably good news for [WA] wineries.”
Ms Mastaglia said recent times had been “a pretty tough slog” for wine producers, and many were experiencing hard times, but WA was surviving on its premium reputation.
“The consistency of high quality WA fruit resulting in wines of distinction over the last five or so vintages (2007-on) is establishing a great reputation for WA wines and we will reap the benefits of this in years to come,” she said.

Source: http://www.watoday.com.au/wa-news/worst-annual-wine-sales-on-record-but-wa-still-raises-a-celebratory-glass-20110823-1j88e.html

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