After a meeting of the national representatives of Wine Grape Growers Australia (WGGA) last week, the WGGA Executive Committee today predicted that the national crush in 2011 is likely to be between 1.3 and 1.4 million tonnes. That would represent a crush of between 19% and 12% down on the previous year’s crush and represents the third annual decline in a row following the 1.83 million tonne crush four years ago.
Drivers of an anticipated lower 2011 crush were (i) lost or rejected tonnages due to disease, (ii) as yet unquantified removed or abandoned vines, and (iii) un-economic or diseased fruit left on the vine or dropped at harvest.
WGGA Executive Director, Mr Lawrie Stanford, issued a warning that despite another apparently lower crush in 2011, the evidence was that the industry was still capable of producing more wine than could be profitably utilised by all members in the value chain.
While the crush is believed to be 1.3 to 1.4 million tonnes, it is understood that a lesser amount (in the vicinity of 1.1 to 1.2 million tonnes) went into wine production that had real prospects of returning a long-term profit in the marketplace.
In what was a relatively cool season that hindered full sugar development, the balance of the fruit above the 1.1 to 1.2 million tonnes going directly into wine production represented otherwise unwanted fruit, purchased well below the cost of production, for the purposes of making concentrate to boost the sugar content of grapes taken in for winemaking.
Alternatively, in a dynamic not fully understood or quantified at this time, the ‘balance’ may have been used for low grade wine in order to compete with low-cost world producers and bulk wine traders. Such practices concerns WGGA because it is only possible by purchasing fruit at well below its cost of production. In the process, this trade is impoverishing growers who in recent years have assumed by far the larger part of the agricultural risk. Moreover, it damages the reputation of Brand Australia in the eyes of wine customers and consumers worldwide and undermines Australia’s aspirations to be, and to be seen as, a premium wine-producing nation. It further devalued the efforts of the nation’s wine marketers to build Australian wine’s reputation at a time when demand was suffering.