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 - Starting a New Business Chapter
Historical increases in both enterprise and establishment numbers according to wine demand suggest low barriers to entry. However, the level of market saturation already achieved by the industry's largest players, mid-tier firms and small independent wineries make successful entry by new players difficult. New entrants can find it difficult to achieve the scale and establish the distribution networks necessary to compete against the industry's largest players. Consequently, barriers to entry are expected to be moderate.
Capital requirements are significant, although operation on a small scale is possible. As some large wine companies divest parts of their operations, these become available for purchase by any potential new entrants... purchase to read more