Industry Analysis & Industry Trends
The Wine Manufacturing industry is in the middle of a downturn. Exports have been hurt by volatile economies in key export markets, a soaring Australian dollar (which has made wine exports uncompetitive) and rising competition from new low-cost wine producers. Manufacturers are losing bargaining power against supermarket giants, and consumer preferences are changing. In addition to these factors, a vast oversupply of wine and wine grapes, has forced down prices, squeezing margins and forcing many producers out of business. However, the emergence of ciders has slightly helped to offset the falling international demand for Australian wines, with domestic demand fuelled by Australians' love for a cold beverage on a hot summers day... purchase to read more
Industry Report - Industry Investment Chapter
IBISWorld expects that the Wine Manufacturing industry in Australia exhibits a medium level of capital intensity. The ratio of capital to labour for the industry is estimated at 1 to 0.23, meaning that for every $1.00 paid as a labour expense, $0.23 is spent on capital investments. Here wages represent labour cost and depreciation has been used as a proxy for capital investment.
Capital intensity is affected by the level of vertical integration, particularly backward integration. Ownership of vineyards tends to increase capital intensity as does ownership of wine making facilities (wine makers have varying reliance on the use of bulk wine)... purchase to read more