AUSTRALIA: Simeon joins warning of grape oversupply
Australia's Simeon Wines has joined those predicting grape supply will outstrip demand and push prices down at the next harvest.
Simeon's chairman John Branson told the company's annual meeting in Adelaide he expected the volume of wine produced by the large companies to be only marginally greater than the 2001 vintage, despite the increase in grape yields, as producers sought to soak up their stock surplus and improve quality.
Simeon last year sold 50% of its output to one of Australia's big four producers, Orlando-Wyndham which has the Jacob's Creek brand.
Despite the uncertainties he voiced, Branson forecast that Simeon would increase exports by 40% in the next two years and push earnings as high as A$17.7m (US$8.85m) this year.
Profit growth would be fuelled by exports, higher margins on domestic wine sales and joint ventures in Europe. Simeon's three wineries crush around 174,000 tonnes a year.
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