LOCAL wine producers are feeling the effects of years of a strong Australian dollar.
A report released recently by the Winemakers Federation of Australia shows the high Australian dollar, falling export demand, oversupply of product and growing retailer power is crippling the Australian wine industry.
Almost half of all Victorian wineries indicated in a recent Wine Victoria survey that they did not make a profit in the 2011-12 financial year.
Heathcote and Bendigo region wine growers said they are finding it hard to compete internationally.
“Our high dollar has been a big problem,” Heathcote Winegrowers Association executive officer Henry Screen said.
“It’s a big challenge to get the product into overseas markets at a profitable price point.
“There seems to be plenty of people wanting to buy wine that is cheap, and Heathcote wine isn’t cheap.”
Mr Screen said the quality of Heathcote’s wine was not even enough to save the region's winemakers, with stiff competition overseas making it tough for them to break the market.
“The problem is, the wine is good, but it’s at a high price point,” he said.
“In overseas market, there is a prejudice to French wines in particular in that high price point.
“People tend to choose that over Heathcote because the perception is it’s better, so it’s a real big brand perception issue which the industry is working to overcome.
“It’s a long-term challenge.”
Bendigo’s Balgownie Estate winemaker Tony Winspear said their UK and US exports were hurting because of the high Australian dollar.
“Our UK and US exports have been way down compared to previous years,” he said.
“Fortunately for us, China has taken up some of the slack."
Mr Winspear said other Bendigo wines were also looking to increase their exports to China.
“The high dollar has impacted on our traditional markets," he said.
“Things are changing and we have to change with it.
“There has been quite a number of local winemakers making overseas trips and exploring forays in Chinese markets.”
The WFA also pushed the importance of exploring exporting opportunities in avenues in growing international markets like China in a conference on the future of the wine industry in Melbourne on Thursday.
The WTF recommended the wine industry works with government on all levels to grow exports to non-traditional markets.
The problem is, the wine is good, but it’s at a high price point.