Wednesday, March 29, 2023

Wine industry wrap

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Kirstin Murdock, Naracoorte Community News

The annual South Australian Wine Industry Snapshot for 2022 was recently released. A collaboration involving the South Australian Wine Industry Association (SAWIA), the report is designed to provide an annual overview of the South Australian wine industry each year, including challenges and wins.

In the south-east region, wineries were among the broader primary industry sector which all still struggled with finding employees – this has significantly increased by 13 per cent compared to 2021.

“Labour availability remains challenging in almost all occupations in the wine value chain. Location and housing are also limiting issues, but to attract and retain labour, businesses will need to assess their attractiveness as an employer and ensure they remain alert to the competition and changing market conditions,” Chief Executive of SAWIA, Brian Smedley said.

“Improving profitability while maintaining market share is a key issue for many wine businesses.

With the loss of sales to the China market, a change in focus is required to look for sustainable growth in wine markets as part of an appropriate geographic expansion strategy using existing or new markets. In addition, working collaboratively with industry bodies and government in targeted trade activities is beneficial.”

South Australian Wine businesses report volume has declined 13 per cent year on year in 2022 compared to 2021 which was a record vintage. Inventory levels remain high, particularly for red wine. The current stocks of red wine lasting 2.6 years, compared with 1.5 years for white wine. Businesses with a turnover of more than $1 million were more likely to state an oversupply than those with lower turnover.

Worryingly, half of the businesses reported having lost or ceased contracted grape sales in 2022. China’s wine duties continue to have a negative impact on 65 per cent of wine businesses. Although confidence is low across the wine industry, Mr Smedley encouraged training and investment in marketing.

“South Australian wine businesses are actively looking for new markets and new channels to distribute their wine which is a world-class product. Wine businesses have benefitted from increased wine sales via online channels. However, wine businesses will need to provide more timely and personalised experience tailored to the online world which is unlike other marketing channels,” Mr Smedley said.

“With business confidence low, it is evident that there is a greater need than ever before for investment in marketing and business strategy, with a key focus on training programs in eCommerce. Undertaking education and training suitable to your business needs will be invaluable to your business sustainability.”

Naracoorte Community News 8 February 2023

This article appeared in the Naracoorte Community News.

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