How High is Up..?

There has been a lot of news about the 2007 Australian grape harvest lately. Frost and drought has affected the grape harvest severely for this vintage and prices are predicted to rise for most wines. Production is expected to be down 400 million litres. While this is good news for the grape growers in Australia, big wine companies may be facing some tough negotiations with these same growers. During the oversupply, grape growers were forced to sell their grapes at practically give away prices but now feel its their turn.
The British wine market has been recognized as a very influential one ever since they pretty much established the Bordeaux wine trade in the middle of the 17th century. While the number one destination for Australian wines has been the UK market there are signs of renewed interest in French and Italian wines. The good news all around however for producers is that there is a definite trend to higher quality and higher priced wines. Tesco, British supermarket giant, reports that sales of wines at £10 or more has grown by 75 per cent over the past two years. The Australian Wine and Brandy Corporation announced plans to convince the Brits and the rest of the world that Australian wines are right up there with the best in the world and deserve higher prices. But perhaps it is too early to predict the demise of the "two buck chuck" phenomena. After all as Fred Franzia of Charles Shaw Wines once uttered "No bottle of wine is worth more than $10." I just happen to believe that good wine can be worth more and perhaps a lot more than $10.

Grape Glut ....or just too many poor quality grapes?

An over supply of grapes continues to plague Australia as well as South Africa. But are these high quality grapes or just too many of the bulk wine grape varieties?




Some interesting comments were posted to this Decanter news release. Similarly Australia is facing the same problem. According to eMediaWire the "plant anything anywhere" approach is to a large extent to blame. As reported by South African Wine News the answer may lie in educating consumers to try higher quality, higher priced wines. Related to this is the report that Yellow Tails wine sales are expected to drop in their biggest market, the US. Are consumers just getting tired of this brand or are their palates becoming more educated? Regardless, the days of cheap wines flooding the market may be coming to an end. This may be a very good thing. There still will be plenty of wine out there but quality will determine their sales success.