MOST people would tell you that the beer and wine industry is a safe and sure way to make big bucks in our present economy.
Unfortunately, the opposite appears to be the reality for the grog brewing industry.
The public company, Endeavour Group which is Australia’s largest retail drinks network has announced that it is retreating from wine production as well as selling its bottling facility in South Australia.
Endeavour owns Dan Murphys and BWS has also announced that it will step away from key vineyards in Tasmania, Victoria and South Australia due to the fact of rising growing costs and the view that retail shoppers are unlikely to accept higher prices for their premium products.
Much of their focus had been on problems with inland wine-grape producing regions such as Riverland, Riverina and Murray Valley, plus these tough times are now spreading to other wine growing regions within Australia.
One industry leader has just commented, “I don’t know if most Australians really know the kind of crisis the wine industry is in at the moment.”
During my thirty-five years in the investment industry, plus the fact that I owned farming and grazing properties for some forty years means that I was well aware of the boom and bust cycles in primary production, but the wine-growing industry has led the failure regime from those occupations.
When you look at the BOM prediction of a major El Nino (low rainfall event) for all of the eastern half of Australia for the remainder of this year, that alone would make any wine grower think hard about remaining in agriculture.
If wine production looks somewhat shaky, how do we think the beer industry might be fairing?
One of our most famous & prestigious beer brewers, James Boag is having doubts too due to the continued fall in beer consumption and is to close its Tasmanian Brewery & bottling plant next November after 145 years of continuous production.
No longer can they now say their product uses the pure & clean waters of Tasmania as it was brewed in Launceston.
Whilst wineries and breweries have a strong connection to the tourism industry.
Their cellar door and brewhouse closures are sure to put further pressure on multiple employment and visitor activity opportunities.
By John BLACKBOURN
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