Declining winery profitability is putting a brake on Australian vineyard expansion. Australian Wine and Brandy Corporation strategist Lawrie Stanford told a meeting organised by the AWBC in Adelaide the average rate of return on winery investments had slumped from 7.6% in 1997/98 to 4.2% in 2000/01.
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Return on bearing vineyards had fallen from 14.7% to 4.8% in the same period. One consequence was that the recent surge in new plantings had come to a standstill despite the continued boom in exports and other bullish indicators.
Stanford said, however, the industry still needed to increase production. “Without more vineyard investment we could be facing a shortage of grapes within years.”
