Despite what’s happening around the globe, I firmly believe that the trepidations currently being experienced by the Australian wine industry are exaggerated and premature. Yes, exports for the month of May were 7.2% less than the same month a year earlier and 3.7% less than the previous month. Yes, the Australian currency has appreciated against the US dollar by over 21% in 2003. On the other hand, the so-called domestic oversupply, the existence of which I have been questioning for around twelve months, is a furphy. There is no over-supply in Australia of good wine. Without question, some Australian wine is over-priced and poorly marketed or distributed, but that is largely due to recent difficult vintages and because of the unrealistic expectations of some producers, often coupled with a total lack of forward planning. While export growth is still powering ahead, the ongoing nature of the drought is very likely to impact on the country’s ability to produce normally expected yields for several seasons in future. OnWine reported on March 25 that the number of years of stocks held in Australian wineries are significantly below historically accepted levels. A domestic over-supply is no reason to feel miserable. Blame something else! The Australian dollar is far from being the only currency to rise against the US dollar. While European currencies have also strengthened, the currency to have made the most progress over the last year is actually the South African rand, and South African wines are often touted as Australia’s most serious export competitor. Right now, it’s not a white-knuckle time for Australian wine. Nobody ever thought the industry’s vision for the future, which is already being handsomely exceeded, would occur without the occasional bump or two. Hang on, but loosen up!
