An update by leading industry research firm IBISWorld has highlighted the dependence of Australian grape growers on wine producers, citing as the key issues facing the grape growing industry as water availability and rainfall, activity in the downstream markets and wine producers’ use of wine grape contracts. The report also highlights the volatility of being a grape grower in the current marketplace, citing the ‘significant uncertainty’ surrounding future conditions and the industry’s dependence of external variables. In other words, it’s very difficult for growers to take significant steps to determine their own fates, unless of course they decide to sell out or uproot their vineyards. Grape growers have had little choice but to learn to deal with an industry that either tells them they’re growing too much or too little. It’s a cycle that appears to be shrinking rather than extending. Due to two (relatively) small recent vintages in 2011 and 2012 there’s been an artificial scarcity of fruit at both ends of the market. Despite this, it’s still costing many growers more to produce their fruit than they can sell it for. Right now it’s harder than it has been to get hold of good bulk wine and good premium wine, but that should correct itself if 2013 produces at anticipated levels. And then we will lurch quickly back to an oversupply, with further downward pressure on prices. IBISWorld anticipates that this volatility will cause the grape growing industry to further decline in revenue for the next five years.
