Wine Manufacturing in Australia Industry Market Research Report now updated by IBISWorld

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The Wine Manufacturing industry is in the midst of a downturn. Exports have been hurt by volatile economies in key export markets, a soaring Australian dollar and rising competition from new low-cost wine producers. As a result, producers are expected to shift their focus to premium wines. For these reasons, industry research firm IBISWorld has updated its report on the Wine Manufacturing industry in Australia.

IBISWorld Market Research

IBISWorld Market Research

The collapse of key export markets is drying up industry revenue growth

The Wine Manufacturing industry in Australia is in the midst of a downturn. Since the mid-2000s, the industry has been hit by a storm of demand and supply-side shocks. Exports have been hurt by volatile economies in key export markets, a soaring Australian dollar and rising competition from new low-cost wine producers. At the same time, manufacturers are losing bargaining power against supermarket giants and consumer preferences are changing. According to IBISWorld industry analyst Ryan Lin, “a vast oversupply of wine and wine grapes, has forced down prices, squeezing margins and forcing many producers out of business”. Having belatedly come to terms with the chronic oversupply of wine in the market, producers are addressing the problem by writing off assets, closing down wineries and destroying vines. The industry faces a long and painful process before the market returns to balance.

Conditions are expected to remain challenging in 2012-13 for the Wine Manufacturing industry in Australia. IBISWorld estimates industry revenue will decrease at an annualised 1.6% over the five years through 2012-13 with revenue expected to reach $7.09 billion. ‘Moderate growth is forecast for 2013-14 as the strong dollar and sluggish global economy take a toll on exports, while weak price growth constrains domestic revenue performance and profitability’ Lin adds. In the two to three years leading up to end of 2017-18, producers are expected to shift their focus to premium wines, while Asian export markets will play an increasingly important role in the industry's future.

Winemakers will likely work on producing single vineyard wines, while focusing more on cellar door and online sales. The four largest Australian wine producers are Accolade Wines, Treasury Wine Estates, Premium Wine Brands and Casella Wines. The Wine Manufacturing industry has a low level of market share concentration. Market share concentration in the industry has changed as major producers have purchased, then divested some production facilities. Industry market share concentration is estimated to have been highest following Fosters Group’s (new Treasury Wine Estates) acquisition of Southcorp.

For more information, visit IBISWorld’s Wine Manufacturing report in Australia industry page.

Follow IBISWorld on Twitter: http://twitter.com/#!/ibisworldau

IBISWorld industry Report Key Topics

The Australian Wine Manufacturing industry purchases grapes and other key ingredients, which are processed into wine, port and wine-based alcoholic beverages. These products are packaged in bottles or casks then sold to wine merchants and retail outlets. Some wineries also sell their product direct to the public via cellar door sales.

Industry Performance
Executive Summary
Key External Drivers
Current Performance
Industry Outlook
Industry Life Cycle
Products & Markets
Supply Chain
Products & Services
Major Markets
International Trade
Business Locations
Competitive Landscape
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Basis of Competition
Barriers to Entry
Industry Globalisation
Major Companies
Operating Conditions
Capital Intensity
Technology & Systems
Revenue Volatility
Regulation & Policy
Industry Assistance
Key Statistics
Industry Data
Annual Change
Key Ratios

About IBISWorld Inc.
Recognised as the nation’s most trusted independent source of industry and market research, IBISWorld offers a comprehensive database of unique information and analysis on every Australian industry. With an extensive online portfolio, valued for its depth and scope, the company equips clients with the insight necessary to make better business decisions. Headquartered in Melbourne, IBISWorld serves a range of business, professional service and government organisations through more than 10 locations worldwide. For more information, visit http://www.ibisworld.com.au or call (03) 9655 3886.

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Gavin Smith
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