Industry Analysis & Industry Trends
Difficult trading conditions have plagued the Wine Production industry over the past five years. Volatile demand from key export markets, a high Australian dollar for much of the period, and rising competition from low-cost overseas wine producers have all hurt wine exports. In the domestic market, producers have lost bargaining power to retailers. Additionally, an oversupply of wine grapes, and the resulting oversupply of wine, has pushed prices downwards.
The industry has experienced a vicious cycle of oversupply over the past five years. Falling prices have not been met with a reduction in production; in fact they have often led to the exact opposite. Industry enterprises have been reluctant to exit even as many have become unprofitable... purchase to read more
Industry Report - Industry Investment Chapter
The Wine Production industry exhibits a high level of capital intensity. IBISWorld uses wage costs and depreciation costs from the Cost Structure Benchmarks section to represent labour and capital investment respectively. For every dollar paid on labour, the average wine producer spends an estimated $0.51 on capital investments. The level of vertical integration, particularly upstream integration, affects capital intensity. Ownership of vineyards and winemaking facilities can increase capital intensity due to some winemaker's reliance on bulk wine production. Bulk wine producers tend to have a higher level of capital intensity, due to investment in winemaking machinery and lower staff requirements in packing and selling... purchase to read more