On tonight's Booze an Nosh show we chatted with Sheralee Davies of Wine Tasmania and Dr Bob Dambergs of the AWRI's Tasmania cluster. It was a great chat about where the industry is at and the direction it is heading. I am really luck that I make wine in this state as we are in a great shape. When other regions are facing low demand/high supply problems we seemed to be blessed with the flip side of the coin. As a region that produces only half a percent of the national crush, we seem to keep batting well above our weight division.
But where is the future? Will our success bring massive amounts of investment with expansive plantings, driving growers premium prices down? Or will sensitive investment bring an opportunity to reach more customers at lower price points?
I think the time is right for starting the discussion, about where the future of the Tasmanian wine industry should aim for.
Audio of the show here
I don't think it's as easy as people think, and trying to compete with other cool climate regions is tough. The average price for fruit in TAS is roughly $2400, Yarra Valley around $1600 in Mornington it's $1900 and Adelaide Hills is about $950. I know that people will pay more than this in those regions, but they are generally selling their wine at the same price or higher. Trying to make decent margin on Tassie wine is a challenge and there are a lot of producers who have made money else where or have alternative income, so aren't that profit driven. For us, to buy fruit to make wine for the wholesale market and make margin is difficult when you have sparkling producers picking up all of the fruit and paying very good prices. Remove the WET rebate and it is twice as tough. I would like to see the price of fruit drop to around $1800/tonne - but this wouldn't give the grower much margin, so it depends on which part of the industry you are in.
ReplyDeleteRebecca, thank you for our comment. Perhaps what needs to happen for the Tasmanian industry is that we all start to raise our prices in line with other high quality regions. We are continually outshining the other regions in terms of quality, so why can we not charge for it. I feel that the price of wine in TasVegas is too cheap, particularly as you say, in relation to our fruit prices. Sheralee of Wine Tasmania was talking about just this subject on the show this week.
ReplyDeleteAs to the WET, hypothetically, what if the industry did change to a volumetric tax, and had a rebate on the first $500,000 of sales? Most Tassy wineries would be better of in this instance. Yes/No?
http://www.vineyardpaul.com/2011/09/that-wet-debate.html
I pored A reply here a few days ago and said something profound and I didn't post correctly. basically we need to work on marketing in order to increase our pricing. This is starting to work on a state level, but individual businesses also need to follow. It is also very hard to sell wine at higher prices.
ReplyDeleteI also think a volumetric tax could work for Tassie producers, but I am married to third generation inland grape grower and understand what is is like for them. They have done a lot for the Australian wine industry it is hard to disregard them for our own benefit. In some ways I would like to see the removal of any rebate which would make the part timers, and those less passionate, unviable. It would also make it tough for us, but I think we would survive. We are making the most of the rebate in anticipation of not having it in the future.
Rebecca, I can't agree more with all your comments.
ReplyDelete