Wine Industry Restructuring Action Agenda

The Wine Restructuring Action Agenda (WRAA) was a joint initiative of the four national wine industry organisations, coordinated by the Winemakers’ Federation of Australia (WFA).  It was launched on 10 November 2009 with the aim of adressing the oversupply issue.

Oversupply is having a debilitating impact on Australian wine businesses and restructuring the supply base is essential.

The aim of the Wine Industry Restructuring Action Agenda is to facilitate the adjustment process, to bring about more sustainable operating conditions as soon as possible, and to dispel any notion that the industry can trade its way out of its current problem or rely on the government to step in.

The original WRAA statement was released to the wine industry by the Winemakers’ Federation of Australia, Wine Grape Growers’ Australia, the Australian Wine and Brandy Corporation and the Grape and Wine Research and Development Corporation on 10 November 2009.

The main points made in the statement are:

  • Structural surpluses of grapes and wine are now so large that they are causing long-term damage to our industry by devaluing the Australian brand, entrenching discounting, undermining profitability, and hampering our ability to pursue the vision and activities set out in the Directions to 2025 industry strategy.
  • Coupled with inefficient and/or inappropriate vineyard and wine operations, oversupply is amplifying and exacerbating fundamental problems in the industry, notably our decreasing cost competitiveness. As such it is compromising our ability to adopt new pricing structures and market solutions and adapt to changing market conditions.
  • At least 20% of bearing vines in Australia are surplus to requirements, with few long-term prospects. On cost of production alone, at least 17% of vineyard capacity is uneconomic.
  • The problems are national – although some regions are more adversely affected – and are not restricted to specific varieties or price points.
  • The industry must restructure both to reduce capacity and to change its product mix to focus on sales that earn viable margins. Bailouts are not an option and neither governments nor industry bodies should be expected to provide the answers; tough, informed decisions must be made by individual growers and wineries, from as early as the 2010 vintage.

In December 2010, a follow-up statement was issued.

This second statement reports on progress and outlines the next phase of initiatives designed to assist the industry’s transition to a new structure based around long-term sustainability and market opportunity.

Download the original statement (2009) in PDF format

Download the supporting document to the original statement.  This paper presents selected explanatory graphs and tables in support of the statement

Download the second statement (2010) in PDF format

Capacity Building for Winegrape Growers

This project was initiated by WGGA and the Department of Agriculture, Fisheries and Forestry (DAFF) in June 2007 and designed to build the capacity of the winegrape sector in line with the key findings of the Taking Stock and Setting Directions report.

The Capacity Building for Australia’s Winegrape Growers project was initiated via a Deed of Agreement between the Department of Agriculture, Fisheries and Forestry (DAFF) and Wine Grape Growers’ Australia (WGGA) in June 2007.  The project was designed to build the capacity of the winegrape sector in line with the key findings and recommendations of the Taking Stock and Setting Directions for the Australian Wine Grape Industry report (December 2006).

The project had four major components:

  1. Wine Industry Strategic Plan review and gap analysis
  2. Vineyard Business Development Program (VineBiz)
  3. Sector innovation
  4. Sector Structure and Leadership

The project was carried out on behalf of WGGA by Scholefield Robinson Horticultural Services.

Download the Capacity Building for Australia’s Winegrape Growers project report (December 2008)

Download the Wine Industry Strategic Plan Gap Analysis and Recommendations (program 1 report)

Download the Regional Vineyard Benchmarking Report (program 2)

More information on VineBiz (program 2)

Taking Stock and Setting Directions

In July 2006, the Australian Government Department of Agriculture, Fisheries and Forestry and Wine Grape Growers Australia Inc initiated the Taking Stock and Setting Directions (TSSD) Project under the Government’s Industry Partnerships Program (IPP).  The IPP is part of the Agriculture – Advancing Australia package, which helps primary industries to become more competitive, profitable, sustainable, resilient and self-reliant.

The objectives of the project were to:

1.  Undertake an analysis of the wine grape industry s current situation and performance.

2.  Identify likely challenges and opportunities for the wine grape industry over the next 5 -10 years.

3.  Determine the capacity of the wine grape industry to respond to current and future challenges and opportunities.

4.  Identify key areas that the wine grape industry could build on to increase their profitability, sustainability, competitiveness, resilience and self-reliance (including  a  process  to  assist  the  wine  grape  industry  to  determine appropriate responses to these key areas).

5.  Assist the wine grape industry to develop its own strategies on issues the industry has identified as high priority.

 

Download the Taking Stock and Setting Directions final report (December 2006)