South Australia wine businesses optimistic about their future

South Australian survey confirms winemakers are looking up towards the future due to several factors:

  • Australian dollar reaching a “sweet spot”
  • China developing taste for Aussie wines
  • Rise in premium bottled wine export
  • Increase in businesses profit
  • Availability of government programs and incentives
  • Association supporting members in key areas such as labour costs, energy costs and security.

South Australian Wine Industry Association chief executive Brian Smedley however expressed his concern about the common lack of knowledge regarding government support offered to wineries:

We need to do more work as an association to make sure people are aware.

What do we think at Troly? irrespective of what any studies or survey has to say, it’s clear that direct-to-consumer is on the rise, and for a majority of wineries it’s proven an absolute life saver ;0)

WINE businesses in South Australia are increasingly optimistic about their future, with almost three quarters of respondents to an industry survey confirming they are confident about the year’s prospects.

Results of the inaugural South Australian Wine Industry Snapshot confirmed anecdotal reports of the sector’s improving economic circumstances, as export markets continued to grow and the Aussie dollar reaches a “sweet spot”.

The positive results were spurred by exports for the State increasing 11.3 per cent during the past financial year, with China’s developing taste for Aussie wines particularly boosting sales, according to South Australian Wine Industry Association chief executive Brian Smedley.

He said wine businesses were reporting that they believed the State’s export star was likely to continue to rise and respondents flagged a focus on premium bottled wine as a key development priority.

“We were aware the confidence levels had changed over the past 12 to 18 months, but we probably weren’t aware of the exact percentage,” said Mr Smedley, whose association jointly conducted the survey with industry partner Bentleys.

Results showed 72 per cent of respondents were confident about their business prospects, with 32 per cent intending to increase staff numbers in the coming year outside of vintage, and 64 per cent intending to maintain their staffing levels.

In terms of business health, 83 per cent said their businesses were generating profits, but 46 per cent of those also reported they needed improvement.

“Sales growth was flagged as an important issue, with respondents indicating a focus on premium bottled wine production as a main business development priority,” Bentleys SA business advisory director Tim Siebert said.

“This is followed by exports, as markets are evolving and opportunities are increasing for South Australian wine businesses to expand into existing markets or explore new markets.”

Mr Smedley said the major surprise was the lack of knowledge across the industry of government incentives and programs available.

“We need to do more work as an association to make sure people are aware,” he said.

The other revelation was about businesses being under- prepared to manage key risks and changes in legislation, like the Wine Equalisation Tax — 44 per cent of respondents believed this would have a significant impact on operations.

The survey results from 81 businesses, mainly wine producers, represented an important cross-section of the industry, according to Mr Smedley.

He said the results would help the association support members in key areas, including concerns over labour costs, plus energy costs and security.

Mr Smedley said the association was already working on opportunities to tackle energy prices including the feasibility of an aggregate offer.

Of those surveyed, 81 per cent wanted more insights to inform their business decisions from industry associations and groups, while only 13 per cent had a business continuity plan to manage key risks.


Originally published on 22 August 2017, at The Adviser


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