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Trends: Insight&Opinion: Australian Production Costs

Over-estimation of export market opportunities for premium wines has caused over-planting, resulting in an imbalance of prices below production costs.
Dec 2006 Issue of Wine Business Monthly
A massive over-planting of Australia's national vineyard in the late 1990s and early 2000s has caused a significant over-supply of grapes across all regions and quality points. This supply and demand imbalance has created strong downward pressure on grape prices. Low fruit prices, while having severe economic impacts on the growing sector, have provided wine producers with some counterbalance to negative factors, such as unfavorable currency exchange rates and tight export markets, where competi...
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