THE VICTORIAN INDUSTRY Located in the Victoria - Clean and Natural south-east corner of the mainland, Victoria is Foods one of eight Australian states and territories. Although small With a worldwide demand for clean, safe and in size, Victoria’s rich soils and temperate climate make it a fresh food, Victoria is in a strong position to very productive agricultural market its superior food and agricultural area, generating one quarter of Australia’s food exports. products to the global community. Victoria has one of the world’s best recipes for natural foods: a temperate climate, a variety of soil types, a clean supply of water, extensive low input farming systems and skilled, efficient farmers who are environmentally responsible. Victoria employs approximately 75,500 people in the agriculture sector (ABS Cat. 6291.0.55.001) and in 2002/03 produced $A6.1 billion worth of food (ABS Cat. 7121.0). The Victorian Wine Industry Wine Production Despite a 21% decrease in production from 2002 to Victoria produces a wide range of quality . The 2003 (ABS Cat. 1329.0), wine exports from Victoria have Victorian wine regions have diverse climate and soil continued to grow year after year with a growth patterns, and each area produces at least one major trend rate of 12% over the last seven years from variety and wine style recognised by national and 1997/1998 – 2003/04 (Tradedata International). international investors and consumers.

Within Victoria there are 19 wine regions (ABS Cat. 1329.0) In 2003, the north-west region of Victoria produced with over 2,000 grape growers producing 66% of all wine grapes and almost all the dried and approximately 21% of Australia’s grapes table grapes. This region typifies higher yields and (ABS Cat. 7121.0). lower grape prices for the cask and premium bottle The wine regions of Victoria are predominantly segments, whilst the rest of Victoria represents located along the Murray River in north-west lower yields and higher grape prices supplying to Victoria, the and central and north- the premium to icon market segments (Source: Whiting, DPI, eastern Victoria, and due to the great diversity in 2004). regional conditions a wide range of wine varieties In 2003, Victoria produced 21% of the national wine are produced. grape production and crushed 15% of the national Victorian wines have established markets in the crush (ABS Cat. 1329.0). This production represented premium and commercial sectors, and have gained 282,000 tonnes (70%) out of a total Victorian grape recognition in Europe, the United States of America, production of 405,000 tonnes, with dried and table Canada and Asia for their high quality and moderate grapes constituting the remaining 30% (ABS Cat. 1329.0). prices. At the premium end of the market, the Victorian wine industry produces , Shiraz, and for red wines, and , Sauvignon Blanc, , Semillon, and for white wines. The premium sparkling wines are produced in the cooler regions of the , Great Western district, Macedon Ranges and the Yarra Valley.

www.dpi.vic.gov.au/agribusiness YIELDS AND VALUE OF GRAPE PRODUCTION AROUND VICTORIA (ABS CAT. 1329.0) Zone Bearing Non-bearing Total (ha) Wine grape Dried and Total grapes Estimated area (ha) area (ha) production table grape (t) value of (t) production (t) wine grapes*

North-west 22,799 2,300 25,098 224,322 122,221 346,543 $132.0m

North-east 3,278 237 3514 22,430 172 22,601 $23.3m

Central 3,157 641 3,798 15,072 345 15,418 $19.2m

Western 1,440 249 1,688 3,589 31 3,620 $5.6m

Port Phillip 3,597 389 3,986 16,529 194 16,723 $27.8m

Gippsland 175 25 200 497 6 503 $0.6m

Total 34,446 3,838 38,284 282,439 122,970 405,409 $208.5m *Calculated from the Australian Regional Wine Grape Crush Survey 2003 data (Source: Whiting, DPI, 2004). Industry Trends and The oversupply of fruit and wine has led to the development of new labels and new cellar door Development outlets have continued to accelerate. This has, in In 2003, the total value of wine produced in Victoria turn, resulted in an increase in winery tourism and through retail, cellar door and export sales, making this sector even more competitive. exceeded $A1 billion (Source: McKenzie, Victorian Wine Industry Association, 2004). This target of $A1 billion was surpassed earlier than predicted indicating high Quality Assurance growth within the Victorian wine industry. Victoria is leading the nation with quality assurance The doubling in the size of the Victorian wine programs that provide high levels of food safety, industry in the last decade has led to some quality and consistency of product, for both structural supply and demand imbalances – domestic and international markets. There is a particularly in the oversupply of premium red wine strong commitment within the industry to adopt grape varieties, in line with a worldwide boom in red improved management practices to further enhance wine consumption. This is most evident in the cool productivity and international competitiveness. climate production districts, which anticipate GrapeCheque is a project funded by the Department oversupply of red wine grape varities for the next 2 of Primary Industries (DPI) that encourages and to 3 years (Source: McKenzie, Victorian Wine Industry fosters industry best practice and adoption of new Association, 2004). technology, including the development of environmental best practices for the growing and harvesting of grapes. DPI GrapeCheque facilitators Mildura are based in key grape growing regions of Victoria.

Swan Hill

Kerang

Shepparton Benalla

Ararat

Ballarat

Melbourne Bairnsdale Portland Sale Warragul

Location of wine grape production areas around Victoria. Key Markets and Exports Trade and Investment In the 12-month period ending June 2003, Australia Opportunities exported 436 million litres of wine to the United There is a continued focus in export development Kingdom, United States of America, New Zealand, for the industry to the United States Canada and Germany. This represented sales in of America, United Kingdom and Europe. The Asian excess of $A2 billion (ABS Cat. 1329.0). Victoria has a region is also showing an increasing interest in greater reliance on the higher value North American wine, reflecting the changing tastes and lifestyles of markets than other states – reflecting the prevalence consumers in this region. of smaller scale, high value exports from the state Victorian producers continue to explore new industry (Source: McKenzie, Victorian Wine Industry Association, 2004). opportunities in emerging markets such as Victorian wine exports increased by 32% to $A435 Singapore, Hong Kong, China, Thailand and million in the year 2003/04 representing 18% of all Malaysia. Australian wine exports. Major growth markets were the United Kingdom, the United States of America There is significant interest from China, in particular, and Canada. regarding Australian wine as Chinese consumers continue to explore new products. Red exports increased by $A25 million (10%) and accounted for more than 60% of total wine exports. Current Research and Projects White table wine exports increased by $A77 million (107%) and exports increased by at the Department of Primary almost $A1 million (27%). Industries The United States of America and the United In conjunction with peak wine industry bodies DPI is Kingdom remain the largest markets for Victorian currently working on the following extension and wine, followed by Canada and New Zealand. research projects: Singapore and Japan are the largest consumers of Grapevine Trunk Diseases. Victorian wine in Asia. • Regulating Yield To Improve Quality. The domestic market will also be important for • future growth of the industry. Domestic sales of • Grapevine Powdery Mildew. Victorian wine are increasing in value rather than • Precision . volume, reflecting a switch from cask and bulk wine Viticare Trials. to high value bottled wine. •

500 VALUE OF VICTORIAN WINE EXPORTS 450 (source: Tradedata International)

400

350

300 $AUD million 250

200

150

100 Other

50 White wine

Red wine 1997 - 1998 1998 - 1999 1999 - 2000 2000 - 2001 2001 - 2002 2002 - 2003 2003 - 2004 Sources and References Industry Organisations and ABS, Australian Labour force, Australia Cat. No. 6291.0.55.001 ABS, Agricultural Commodities Produced 2002-03, Australia Cat No. 7503.0 Support ABS, Agricultural Commodities 2002-03, Australia Cat No. 7121.0 The Agribusiness Group at DPI provides a market ABS, Australian Wine and Grape Industry 2003, Australia Cat No. 1329.0 Tradedata International, Export statistics available on request driven focus for the Victorian agrifood sector. The McKenzie, M. 2004. Victorian Wine Industry Association Group is comprised of a network of Agribusiness Whiting, J. 2004. DPI, Wine Industry Supply Chain Development Officers located throughout regional Victoria working with regional wine producers and companies and a team of Market Development Officers gathering intelligence in Victoria’s key export markets, primarily in Asia. The Agribusiness Group is supported by industry development groups within DPI working with producers to improve and increase sustainable production. There are a number of organisations representing the Victorian Wine Industry. Industry Contacts These include: The Victorian Wine Industry Association • The Victorian Wine Industry Association. www.vwia.org/vwia/VWIA-home.htm • Winemakers Federation of Australia. Winemakers Federation of Australia • Australian Wine Export Council. www.wfa.org.au • The Australian Wine and Brandy Corporation. Australian Wine Export Council www.awec.com.au All parties interested in exporting Australian wine Telephone: +61 8 8228 2040 should log onto www.awbc.com.au. The Australian Wine and Brandy Corporation www.awbc.com.au Telephone: +61 8 8228 2000 Government Contacts Agribusiness Group Department of Primary Industries www.dpi.vic.gov.au/agribusiness Email: [email protected] Telephone: +61 3 9658 4700 DPI Customer Service Centre www.dpi.vic.gov.au Department of Innovation, Industry and Regional Development www.iird.vic.gov.au

©The State of Victoria, Department of Primary Industries, 2005. This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication. ISBN: 1 74146 989 9

www.dpi.vic.gov.au/agribusiness