Saturday, January 17, 2009

Bulk Wine and 2009


Of great interest to grape growers is the latest report from Jim Moularadellis from Auswine Bulk Wine Brokers as seen on pg 84 of the January's Australia and New Zealand Grape Grower and Winemaker.

It gives a simple insight into scale of the problems now faced by the industry. To put things in context their are 29 million litres of Chardonnay on the bulk market, 24 million litres from last year alone. There are 22 million litres of Shiraz available, with 16.7 million being from the 2008 vintage.

Assuming crops of 15 tonnes to the hectare, in area terms, this is equal to ten times the amount of wine a region the size of McLaren Vale planted entirely to Chardonnay would produce. Ten Chardonnay only McLaren Vale's on the market. There are also seven McLaren Vale's of Shiraz, five of Cabernet Sauvignon and the area equivalent to four Langhorne Creek's of Merlot for sale.

It is a lake of a problem with exports dropping.

Of particular interest is this comment;

"In times of over supply, the price of all grapes becomes nearly the same, regardless of where they are from. In such circumstances, if presented with a choice, winemakers will more likely buy (generally better quality) cooler climate grapes and leave warmer inland grapes unpicked. This is what happened during 2005 and 2006 when conditions were similar to those expected for 2009. Not that this is great news for cooler climate growers because 2009 spot prices are likely to be below the cost of production in most regions," says Bill.

In summary prices for grapes for cool-climate regions are being forced down, as they are being used in place of warm-climate grapes which are going unpicked. Both sections of the grape growing community are under extreme pressure.

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