AUSTRALIA: Wine prices highlight growing competition
The latest official figures from Australia confirm the fierce competitiveness and profit margin squeeze across the domestic wine market. And the figures provide another inducement for those producers who can foster export sales.
The Bureau of Statistics figures show that wine prices in the year to March 2002 rose 2.6% which was below the official inflation rate of 2.9%. It was also well below the 5.8% recorded in the year ended March, 2001.
The growth in market dominance by the quartet of major producers, Southcorp, BRL Hardy, Fosters (through Beringer Blass) and Orlando Wyndham, is now mirrored at the retail end of the trade.
Aggressive expansion to build market has seen the local giants Coles Myer and Woolworths acquiring and reflagging stores across Australia. Coles Myer now has more than 500 outlets while Woolworths has more than 400.
Together they account for about 30% of the market with smaller retailers now forming buying groups to achieve economies of scale.
Australian wine consumption is equivalent to about an annual two dozen standard bottles per capita for the 19 million population, 81%, is table wine.
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