Posts Tagged Global wine markets

Crush 2011! Key wine industry facts presented by Prof. Kym Anderson

Professor Kym Anderson of Wine2030 and the Wine Economics Research Centre gave a fascinating and informative presentation at the plenary session of the Crush 2011: The Grape and Wine Science Symposium in Adelaide, entitled ‘Wine’s globalization: New opportunities, new challenges for Australia’.

The Crush 2011 symposium, organised by the Wine Innovation Cluster, brought together top wine and grape researchers from all over Australia and overseas, from universities, research institutes, industry and government to present the latest cutting edge research, to network and to foster future collaborative opportunities. The University of Adelaide had a strong attendance, as did the Australian Wine Research Institute (AWRI), Commonwealth Scientific and Industrial Research Organisation (CSIRO), the University of South Australia, Grape and Wine Research and Development Corporation (GWRDC), South Australian Research and Development Institute (SARDI), and other universities and institutions around Australia and overseas. Inspiring talks were provided in the plenary session at the National Wine Centre by GWRDC Chairman Rory McEwen, Kym Anderson, John Brooks of Zork, Mark Thomas of CSIRO Plant Industry, Keren Bindon of AWRI and Rebekah Richardson of Pernod-Ricard Pacific.

Professor Anderson gave an insightful and concise summary of the challenges facing Australia’s wine industry today, essentially:

• Profits of wineries have nose-dived

• Winegrape prices fell sharply in 2009, 2010 and in 2011

• Bulk wine exports 47% in 2010-11, up from 15% 1996-2003

• Import share of domestic wine sales has risen from 3% in 2001 to 15% in 2010-11 (NZ, France, Italy)

• Volatility of weather is not expected to lessen

Trade is a huge consideration for the Australian wine industry, with 66% of our wine production exported in 2009. Meanwhile the world market for wine has got tougher with the strong Australian dollar, fashion swing away from our wine in the traditional markets (UK, US, Germany), strong competition from other global producers, oversupply of wine in Europe, the growth of supermarket power in wine sales, environmental concerns, and so on. Plus wine is being targeted in a number of countries including Australia with regard to negative health implications, including rising taxes and regulations.

However! Globalisation has a long way to go and there are huge opportunities as wine expenditure grows around the world, particularly in Asia, dominated by China. Furthermore, in terms of the average price of bottled still wine imports, five of the top 10 countries globally are Asian so there are profits to be made!

The data behind Kym’s presentation are from a new compendium of global wine statistics, downloadable as a free e-book at or in Excel format at

Kym Anderson is the Executive Director of the Wine Economics Research Centre, University of Adelaide, and a member of Wine2030, University of Adelaide.

Details of the Crush 2011 symposium including full programme and abstracts may be found at


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GIs for wine and food: Lawyer Dr de Zwart addresses the global debate and Australia’s position

Dr Melissa de Zwart, Law School, University of Adelaide

Dr Melissa de Zwart, Associate Professor in the University of Adelaide’s Law School is researching the highly topical and contentious, even emotive subject – both globally and locally – of Geographical Indications (GIs). Working in the wine arena, I am familiar with the GIs as set by Wine Australia, and I expect most wine aficionados to have noticed that we no longer use terms such as port, sherry, burgundy, or champagne to describe our wines, since they are regional names in Europe. Melissa looks at the legal process leading to these changes and the wider issues surrounding the possibility of extending this system to foodstuffs and beyond, and where each global player stands on the subject, with poignant examples taken from the South Australian experience. The answers are not straightforward as you will see!

The full discussion will be released as a chapter entitled: ‘Geographical Indications: Europe’s strange chimera or developing countries’ champion?’ in the book entitled Law of Reputation and Brands in the Asia-Pacific Region (forthcoming, Cambridge University Press). The book looks at what makes the Asia-Pacific region distinctive in its response to issues arising from branding and the use of signs in marketing, contributed to mostly by lawyers and economists.

Why ‘chimera’?
According to Greek mythology, a chimera was a fire-breathing monster with the head of a goat, the body of a lioness, and a tail with the head of a snake. This bizarre mismatch of a creature has come to symbolise a mismatch of components. For GIs the components are politics, marketing, history, agricultural features and quality control.

What exactly are GIs?
The definitions of GIs are not consistent and the interpretations are not watertight. Consequently, as Handler (2006) states, GIs are “the form of intellectual property that does not command universal respect”. As Melissa states in her paper, “Unlike other intellectual property rights, such as copyright, patents and trade marks, which have a relatively settled, albeit occasionally controversial, underlying rationale, GIs rest upon an uncertain and contested basis.” In fact she says that GIs may not even strictly be intellectual property (IP) rights, but more of a “hybrid” of IP, and agricultural and trade policies and regulations.

The definition of GIs in the relevant Australian legislation (the Wine Australian Corporation Act ) is:

“geographical indication, in relation to wine goods, means an indication that identifies the goods as originating in a country, or in a region or locality in that country, where a given quality, reputation or other characteristic of the goods is essentially attributable to their geographical origin”

However, Melissa encompasses the global context in her chapter, choosing to start with the Trade-Related Aspects of Intellectual Property Rights (TRIPS) Agreement arising from the WTO round of negotiations in Doha. This agreement, which requires member countries to provide legal protection to GIs, defines GIs as:

“Geographical indications are, for the purposes of this Agreement, indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographical origin.”

Wines and spirits are then treated differently in the TRIPS agreement, giving them greater protection, so that there any product made outside a given GI is not permitted even a reference to a varietal or type or style relating to that GI. So, for example, a wine label cannot say “made in the style of Bordeaux” or “Barossa-type shiraz”.

Origin of GIs
The TRIPS definition of GIs is based on the the Lisbon Agreement for the Protection of Appellations of Origin and their International Registration 1958. This evolved from the French system of appellation d’origine controllée (AOC), which is turn based on terroir – the delineation of an area based on climate, topography, soils and specific products from that region. It did not only refer to wine originally but the term terroir is associated largely with wine today.

Wine vs. foodstuffs
On the Wine Australia website you find see the lists of GIs and the marketing campaigns based around these GIs, giving regions a hook to represent their products to tourists and consumers. Regional Heroes is a marketing initiative that promotes Australian wine based its source region, so it seems that GIs have been interpreted and used to the advantage of our wine industry.

But! GIs relate to trade in general and have global implications. I shall not steal Melissa’s thunder but some key issues she covers include:

• The current concerns as they relate to the Old World and the New World.

• The differences and issues relating to extending GIs to food and other products.

• Will the extension of protection help or hinder developing countries?

• What determines authenticity and is it possible or desirable to introduce a definitive system of GIs for more products and regions?

Interestingly, this issue sees the Old World and New World in contrasting positions, the key players being the EU and the US. While Europe wants to expand the protection of GIs from wine to food, US wants to restrict it because they make a lot of use of these traditional names. Australia too makes use of many traditional European names, for the same reasons as the US – it was settled hundreds of years ago by Europeans who brought their crafts, traditions and language to their new homes.

Melissa raises a number of issues that show why food is different to wine in the GI debate. How do you define the correct food in terms of origin of ingredients, preparation technique, who made it, and so on. How could this be checked and enforced and would changes be allowed over time? Could this stilt innovation if not? If so, how could this be managed? It would be an understatement to say that delving deeper into these questions is opening the proverbial can of worms.

Should developing countries want GIs to support them in distinguishing their traditional products from specific regions, and possibly charge higher prices and have a greater level of protection than otherwise? Would this work? What if a country’s traditional product was hijacked by foreign companies with money to buy all of the production capacity? This happened in Mexico with tequila – with a high proportion of the country’s production being owned by US-based companies.

What determines authenticity? To use a South Australian example, if GIs were extended to food and strictly enforced, it may be that makers of traditional German foodstuffs in the Barossa area would not be permitted to use the traditional German names. Is this protecting rights or creating confusion? Is the product less authentic than the version produced in Germany because it is made in another location, irrespective of the heritage? Some argue that the Barossa versions are more authentic as they have preserved many traditional recipes and techniques. Would the definitions be set in legislation and have no flexibility to move with culture, since food is such a culture-based product?

What next?
For the full juicy insight, this book will be released in the near future. Being on the front foot, a group of food producers in the Barossa have licensed the ‘Barossa Food’ logo,: see Food Barossa Inc., Food Barossa (March 2011).

For more on GIs for Wine in Australia go to Wine Australia web page.

Melissa de Zwart’s blog may be found at Bram’s Pyre.


Michael Handler, ‘The WTO Geographical Indications Dispute’ (2006) 69(1) Modern Law Review 70–91.

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Wine2030 reaches out to the Gold Coast

Wine2030’s Nicola Chandler (aka Tigs) took the Wine2030 message to the Gold Coast, talking to Bond University’s wine studies students, (click here to go to for the full article and beautiful campus photos), seeing what they are learning and opening them up to a new source of information and contacts. Nicola attended Steve Knight’s wine studies course at Bond, kicking off the class with a presentation showing the key areas of the University of Adelaide that are involved in wine research.

Nicola is mostly involved with Wine2030 and the Wine Economics Research Centre so these sources were her focus. She highlighted examples of research ongoing at the university and the amazing resources open to researchers and students in Adelaide, including the University of Adelaide’s Hickinbotham Roseworthy Wine Sciences Laboratory at the Waite campus. She also showed the students some juicy statistics from the recently released Global Wine Markets, 1961 to 2009: A Statistical Compendium, produced by the Wine Economics Research Centre.

The importance of social media in sharing wine research and encouraging information flows formed the second half of the talk to the students – the use of Twitter, blogging, websites, and a whole new approach to sharing information in addition to traditional media. Social media opens so many more doors in expanding the audience and enriching research and communication. Social media makes research more accessible. See Tig’s Ten Commandments for Engaging in Social Media for a simple guide to approaching this area. Please feel free to share the commandments and all feedback welcome!

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Decanter wine writer Andrew Jefford promotes the Global Wine Markets statistical compendium

Andrew Jefford, wine writer for Decanter magazine, writes about the Wine Economics Research Centre’s recent release, Global Wine Markets, 1961 to 2009, A Statistical Compendium in an article entitled: “Jefford on Monday: All The Figures That’s Fit To Print“.

Jefford picks out juicy snippets from the burgeoning compendium, making you want to delve deeper and questioning your assumptions about the shape of the world wine market. How dependent are France and Italy on wine exports? Which countries’ wine markets are most dominated by large wine companies? What is the per capita wine consumption in Australia? Or the UK? All of these answers are freely available in this valuable statistical resource.

Full information on the compendium is freely available in pdf or Excel format by chapter from the WERC website at this page.

The full pdf is free to download from the University of Adelaide Press and you may also order the hard copy for just AUD35.00.

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Australia’s evolving role in the world’s wine markets

On 8 June 2011 Professor Kym Anderson of the Wine Economics Research Centre of the University of Adelaide spoke to the Barossa Next Crop Leadership Program at the National Wine Centre in Adelaide about Australia’s evolving role in the world’s wine markets. He outlined the main challenges to Australia’s wine industry today – falling winery profits, falling winegrape prices, rising bulk wine exports as a share of the total, and rising imports of wine as a share of domestic sales. He provides great insight into the underlying reasons and looks at the potential for this industry going forward.

Rounding off his presentation, the take-away messages were:

*      Boom/bust/slow-recovery cycles are normal for the wine industry

*      But the present one involved a more sudden and severe downturn than expected due to rapid acreage expansion in previous 15 years plus drought, and then GFC, strong A$, strengthened competition from other wine-exporting countries

*      Vine-grubbing in Australia and the EU is easing the over-supply, and growth in Asian wine imports is boosting demand

*      Climate change may require vignerons to alter their varietal mix and/or moving to higher latitudes and altitudes

*      If Australia switched to volumetric wine tax, expect quality upgrading

*      But climate change and tax change will hurt irrigated areas most, as is greater competition from lower-cost exporting countries

*      Foreign investment could put a floor on vineyard and winery asset values in Australia

*      More investment in innovation is vital (R&D and promotion)

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Global Wine Markets, 1961 to 2009: A Statistical Compendium

Global Wine Markets, 1961 to 2009: A Statistical Compendium

This comprehensive and expertly researched publication provides detailed global wine statistics – a must-have reference for anyone working in, or even just interested in, the wine industry.

The University of Adelaide’s Wine Economics Research Centre has produced this latest edition in a major revision, expansion and update of the preceding compendia.

The complete pdf version of Global Wine Markets, 1961 to 2009: A Statistical Compendium may be downloaded free of charge from the University of Adelaide Press, and a hard copy may be ordered for A$35.00 plus postage.

Overviews of key sections (PDF), charts (PDF) and tables (PDF and Excel) are available from the Wine Economics Research Centre.

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Quaff next? Exploring the global future for Australian wine

At the University of Adelaide’s Research Tuesday lecture on 8 March 2011, Professor Kym Anderson identified key trends in the global wine industry, using data from the forthcoming University of Adelaide publication Global wine markets 1961 to 2009: a statistical compendium, due for release in April 2011.

The focus of the presentation was to understand how the wine industry has arrived at the situation it now finds itself in, and what the prospects might be for the next two decades out to 2030.

Boom-bust cycles have been a feature of the Australian wine industry since its birth in the mid-1800s. The latest boom period is defined as the period 1987-2004 where Australia fared extremely well both domestically and overseas. Many factors were in its favour. Since then however, a number of factors have come together in a perfect storm to produce this current downswing, including a strong Australian dollar, an increasingly competitive global market, changing market and marketing conditions and consumer preferences, and climactic factors.

Professor Anderson looked at the trends in wine production, consumption and trade in the Old World, New World and ‘rest of the world’ countries, particularly since 1980. The Old World refers to France, Italy, Spain, Portugal and Germany, and the New World refers to the USA, Australia, New Zealand, Argentina, Chile and South Africa. An interesting summary table of developments in shares of global wine production, consumption and trade are shown in the table below.

  1980-84 2009 2009
  volume volume value
Share of global production (%)
Old World 5 58 53 50
New World 6 18 26 30
Rest of the world 34 21 20
Share of global consumption (%)
Old World 5 53 28 60
New World 6 19 21 31
Rest of the world 28 41 9
Share of global exports (%)
Old World 5 76 34 67
New World 6 2 26 24
Rest of the world 22 40 9


Professor Anderson discussed the inherent strength of the Australian wine industry and the challenges lying ahead for producers and marketers.

Listen to his presentation here and view his presentation here.

Global wine markets 1961 to 2009: a statistical compendium will be available directly from the University of Adelaide Press (pdf free; paperback $35).

Professor Anderson is the George Gollin Professor of Economics and foundation Executive Director of the Wine Economics Research Centre at the University of Adelaide.

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