strategic plan for the victorian wine industry 2006–2010
In Victoria, winemakers and wine By 2010 the industry will grow the total sales
grape growers are committed to quality, value of Victorian wine by 42 per cent to
environmental awareness, and to international $1.8 billion through expanding the domestic,
leadership in the production of premium wines export and winery tourism markets to achieve
which reflect the unique diversity of sustainability of the industry.
Vintage 2010: Strategic Plan for the Victorian a means of achieving a sustainable future. As
Wine Industry 2006–10 is the second five-year the cornerstone for building the presence and
plan for the Victorian wine industry. The previous reputation of Victorian wines in Australia and
Vintage 2003 Plan exceeded its ambitious growth overseas, Vintage 2010 promises a new ‘Wines of
target of $1 billion in total sales for Victorian wine Victoria’ brand that will enable our producers to
within the planned period. Vintage 2010 sets a set themselves apart in today’s wine market.
new goal of $1.8 billion in sales over the next five
years – an equally ambitious target given the more The Government will support the development of
competitive environment now facing Victorian the ‘Wines of Victoria’ branding and the Vintage
wine producers. 2010 promotional programs, through a grant
of $200,000 to the Victorian Wine Industry
Not surprisingly, the Victorian industry is feeling Association, and a further $60,000 for the delivery
the effects of the rapid growth in winegrape of education programs in wine business and
and wine production. An oversupply of red wine marketing skills, as announced in the Moving
is exerting downward pressure on the price of Forward initiative for Provincial Victoria in
red wine and grapes and this supply–demand November 2005. Together with industry
imbalance is likely to continue in the medium co-funding, these grants will encourage the rapid
term. Twice the number of producers are now implementation of Vintage 2010’s key initiatives.
vying for their slice of the market compared These initiatives, combined with our existing
to 10 years ago. Export markets are also more financial support for food and wine tourism
competitive due to world supply levels and greater development and marketing, the Exhibition of
competition from other Australian wine exporters Victorian Winemakers, the annual program
as well as from traditional and emerging wine- of wine export missions and trade fairs, the
producing countries. Nevertheless, Victorian Federation Square Regional Wine Showcase series
wine exports are growing rapidly, reaching $525 and the Great Wine Capitals: Global Network,
million in 2005-2006 and almost doubling over the demonstrate the Government’s commitment
three years to June 2005. to Victoria’s wine industry as a priority sector
because of its contribution to regional economies
However, more needs to be done to promote and to the value of Victoria’s exports.
Victoria’s unique range of wine styles from across
its 22 wine regions if our producers are to prosper I commend Vintage 2010: Strategic Plan for the
and grow in such an intensely competitive climate. Victorian Wine Industry 2006–10 to Victoria’s
All market sectors will be important in finding winegrape and wine producers for their support
outlets for Victoria’s wine production. Smaller and adoption.
wineries will rely on increasing distribution in
restaurants, specialist wine retailers and growing
their winery tourism markets. Medium and larger
wineries need to build national distribution in Hon John Brumby MP
the retail sector and increase their exports as Minister for State & Regional Development
Executive summary 7
Victoria’s wine industry 10
Recent industry performance 11
Industry outlook 12
Key issues - the voice of industry 13
Growth drivers and challenges 14
Shift in demand to lower-cost winegrapes 14
Overhang of cool-climate red winegrapes 15
Red or white wine? 15
Domestic market discounting 16
Consolidation of liquor retailing 16
Strategic plan 2006–10 - Key Outcomes 18
Objectives and actions 19
The Victorian wine industry has doubled in • Growing the market for Victoria’s premium The management of the ‘Wines of Victoria’
size in the last decade. The rapid expansion in wines through promotion in the winery branding program and the development and
vineyard plantings and wine production between tourism, cellar-door, restaurant distribution, implementation of promotional strategies for the
1999 and 2003 has resulted in an oversupply of specialist retail and export sectors. retail, restaurant, winery tourism and export
red winegrapes and wine, lowered winegrape and markets will be undertaken by a Vintage 2010
• Better managing business costs.
wine prices and contributed to lowered profitability task force under the leadership of the Victorian
for grape growers and winemakers. As well, the • Continuing to produce consistently high-quality Wine Industry Association, with representation
expanded number of new (particularly small) winegrapes and wine products. from regional wine industry associations, Regional
winery enterprises has increased competition • Improving the skills of industry members. Development Victoria and Tourism Victoria.
between wineries for the growing wine
tourism market. • Increasing the competitiveness and
The Victorian Wine Industry Association will
sustainability of the industry through investing
adopt a more assertive role in wine industry
In the domestic market, the increasing power strategically in new production, winery
education and training courses to ensure delivery
of the large liquor retail chains is creating tourism infrastructure, marketing and
of needed skills. The national WineSkills program
discounting cycles and tightening access to the enterprise management.
will be reviewed to deliver a focus on enterprise
retail market for small and medium-sized wineries. management and marketing. For Victorian
Vintage 2010: Strategic Plan for the Victorian
wineries, management best practice will be
Exports now account for 60 per cent of Australian Wine Industry 2006–10 is directed to achieving
promoted through published case studies that
wine sales with the volume growth in exports four key outcomes:
highlight alternative approaches to wine business
coming from the ‘popular premium’ wines • Grow total sales by 39 per cent from $1.31 structures, use of infrastructure and
produced mainly in the three big inland vineyard billion to $1.82 billion. supply-chain management.
areas of Murray Darling–Swan Hill, Riverina and
• Grow annual exports by 10 per cent per year
Riverland. However, firming of the Australian Adoption of best practice production techniques
from $525 million to $845 million.
currency, increasing competition in export and management practices will be encouraged
markets and the pressure to clear accumulating • Expand cellar-door sales by 6 per cent per year through initiatives such as a five-year Best
wine inventories into export markets have caused from $228 million to $305 million – achieving Production Plan - linked to education and training
a marked decline in the average price per litre five million winery visits per year. programs designed to continually improve the
obtained from exports. In this environment there * Grow domestic retail sales by 5 per cent per technical skills of industry members.
has also been a fall in export demand for premium year from $558 million to $712 million.
Australian wines, a trend that is having a serious The industry will also work towards the
impact on many of Victoria’s small and medium- development of a Victorian and national vineyard
sized producers, particularly newer entrants into A new ‘Wines of Victoria’ branding program will register to provide accurate data on the types and
the industry. lift the profile of Victorian wines, differentiate locations of winegrape plantings in Victoria and
Victorian products in the marketplace, and allow to enable industry-wide communication on vine
The continuing oversupply of winegrapes and the Victorian wineries to leverage their improved health and biosecurity issues.
overhang of wine stocks are likely to be continuing ‘visibility’ to grow their markets and market share
features of the industry for the next few years, – particularly in the premium, super-premium and
until balance is restored between supply and ultra-premium range where iconic wines and wine
demand. Increased export competition and the regions can be used to define the market position
increasing power of the large liquor retail chains of Victorian wine.
are also likely to persist. In this sharply more
competitive environment the primary challenge
for the Victorian wine industry is to ensure the
ongoing viability of the industry by:
Victoria’s wine industry
Victoria has an extensive history of wine Victoria’s diverse climates and soils were capable
production. The first commercial vineyard was of producing world-class sparkling and table
planted at Yering in the Yarra Valley in 1838. By wines as well as fortifieds, were keen to develop
the 1850s there were vineyards and wineries near a presence in the revitalised and burgeoning
Geelong, at Great Western and across central and domestic wine market. Since 1990 the Australian
north-east Victoria, many of them developed by wine industry has very successfully developed its
Swiss and French immigrant vignerons. export markets, achieving $2.79 billion in annual
sales by 2005. To meet this unprecedented market
Victoria’s gold rush of the mid-1850s supported growth, the Victorian industry has doubled in size
a flourishing industry that produced sparkling, over the last decade, as has the wider Australian
table and fortified wine. By the 1870s Victorian wine industry.
wine estates were winning gold medals at the
great exhibitions of Europe, raising some alarm Victoria’s wineries (320 in 1999 and 583 by 2005)
in the European wine world. Dubbed ‘John Bull’s are spread across 22 wine regions. With the
Vineyard’ by the British colonial authorities, highest number of wineries and wine regions
Victoria was expected to rapidly surpass France of any Australian State, Victoria produces an
as a supplier of fine wines to the British Empire. extraordinary diversity of wine styles and
varieties. Victoria represents 28 per cent of the
But within two decades the Victorian wine nation’s vineyard plantings and 24 per cent of its
industry was almost destroyed. The destructive winegrape/wine production.
vine louse phylloxera, introduced into the Geelong
district in 1877, rapidly spread through central The modern Victorian wine industry is an
and north-east Victoria. That was followed industry of two parts. The large tracts of vineyard
by a shift in consumer preferences from fine and the large-scale wineries in the Murray–
table wines to fortifieds. The final blow was the Darling and Swan Hill regions of north-west
Depression of the 1890s, which brought about Victoria are the ‘engine room’ of Victorian wine
a collapse in local and export markets for production, representing 80 per cent of the State’s
Victorian wines. Many vineyards were removed production. This zone, one of the top three centres
and never replanted. of national wine production, produces popular
premium varietal table wines and bulk wine for
In the subsequent 60 years Victoria lost its the consumer cask market, and supplies the rapid
dominance of Australian wine production to growth in export demand for value-for-money
South Australia. By the end of the 1950s only Australian wines.
the remnants of Victoria’s once extensive wine
industry remained – a handful of wineries The remaining 20 per cent of Victorian wine
across the north-east, the Murray Valley in the production is located from western Victoria to
north-west, Great Western and the Goulburn Gippsland in the east, and from the Mornington
Valley. By 1966 only 16 Victorian wineries were Peninsula in the south to Rutherglen and the
still operating. Alpine Valleys of the north-east. This sector of
Victoria’s wine industry, comprising more than
A remarkable renaissance has occurred over the 500 wine enterprises, is dominated by small
past 40 years. In the late 1960s a few visionaries winemakers who generally produce fewer than
planted new vineyards in the old vine districts 5000 dozen bottles of wine a year. These small
of central and southern Victoria. In the 1970s producers, who typically focus their efforts on
the advent of the four-litre wine ‘cask’ created a high-value super-premium and ultra-premium
new market for the grapes of the Murray Valley wines, compete for a share of the top 5 per cent of
districts in north-west Victoria. By the 1980s the domestic wine market.
many new Victorian vignerons, discovering that
A bumper national crop of 1.92 million tonnes
of winegrapes in 2005, following a similar
crush in 2004, has left Australian winemakers
overstocked. This oversupply, coupled with slower
export growth, continues into vintage 2006.
Australian winemakers are holding excess stocks
amounting to almost six months of current sales
– some 500–600 million litres of wine, or the
Recent industry performance equivalent of 700,000–800,000 tonnes of grapes.
Market growth is driven by exports, which grew
Target for 2003 ¹ March 2002 (est.) ² June 2005 (est.) ² at almost 15 per cent in 2005, mostly in the
Total value of sales $1 billion $923 million $1.311 billion popular premium sector. The overproduction of
Exports sales $300 million $229 million $525 million grapes from cool-climate regions following big
Cellar-door sales $120 million $168 million $228 million production years in 2004 and 2005 has not eased,
Winery visitors 3.5 million visits 3 million visits 3.3 million visits and will continue to suppress grape prices in the
Domestic market sales $580 million $526 million $558 million medium term.
Industry investment $650 million $680 million $730 million
With more and more grape production destined to
Additional employment 3000 jobs 2536 jobs 3913 jobs
meet demand for generic brands, any shortages
1 Extract from ‘Vintage 2003, The Industry Vision’ of grapes in a particular region may be readily
2 Estimated from Government and Industry Sources
sourced from other regions. It is important
therefore that any consideration of expected
intake and winemaker preferences is made
in the context of the national position. The
substitutability between regions means that
competitive forces in the grape market will
transcend State boundaries.
Winemaker sentiment, as measured by the Pricing
and Utilisation surveys, is positive. Given little
growth in expected production of red grapes
over the next three years and steady growth
in winemakers demand, red grape supply and
demand appears to be heading into balance in the
medium term. Only marginal increases in bearing
area are expected for white grapes (mostly
Chardonnay for the inland regions). This should
keep national grape production within the band of
1.9 to 2 million tonnes.
[Reference: Greater Victoria Wine Grape
Outlook Summary 2006 – 2010, produced by
McGrath-Kerr Business Consultants on behalf of
the VWIA, utilising residual trust funds from the
Greater Victoria Wine Grape Industry
Key issues – the voice of industry Growth drivers and challenges
Industry-wide consultations during 2005 revealed that industry members viewed the following issues as most Exports Shift in demand to lower-cost winegrapes
critical to their present and future survival.
The rapid expansion of national and Victorian A more competitive export market and the
vineyard plantings since the mid-1990s has been growth in the popular premium category in both
The overhang of cool-climate grapes is lowering returns for winegrape and wine producers. largely driven by the unprecedented growth in export and domestic wine markets is causing a
Australian wine exports, which have increased significant shift to winegrape purchases from the
from some A$100 million in 1990 to A$2.79 billion three major inland production zones. Winemakers
The expanded number of new (particularly small) winery enterprises has increased competition
in 2005. Exports now account for 60 per cent of are now actively seeking lower-priced winegrapes
between wineries for the growing wine tourism market.
Australian wine sales. to better meet the lower price points for wine
currently being dictated by the market.
Victoria’s overall market share is declining. Initially in the United Kingdom and more recently This trend runs counter to the trend to lower-
in the United States, Canada, Continental Europe, volume, higher-value wines predicted in ’Strategy
Scandinavia and Asia, Australian wines have 2025’, the 30-year plan (1996–2025) for Australia’s
Large volumes of inexpensive South Australian wine are increasing competition.
forged a significant presence. By 2005 Australia wine industry.
was the leading source of wine imports in the
The trend to treat wine as a commodity resulting in difficulties in encouraging consumers to ‘trade up’. United Kingdom, ahead of France, and the second While that longer-term trend may still be realised,
highest in the United States, only slightly behind in the short to medium term an oversupply of
Italy. Overwhelmingly the volume growth in winegrapes and large wine inventories will
Continuing consolidation of retail outlets for wine is tightening winemakers’ access to the domestic exports has been in the ‘popular premium’ wines continue to suppress prices for winegrapes and
retail market. that are priced below the equivalent of A$10 wine, and wine companies will continue to source
per bottle – wines that are mainly produced in lower-cost fruit.
The variability and inconsistency in the quality of Victorian wine. the three big inland vineyard areas of Murray
Darling–Swan Hill, Riverina and Riverland. The shift away from cool-climate regions as
a primary source of grape supply for the large
Reference by some United Kingdom wine writers to `industrial’ Australian wines is undermining the However, firming of the Australian currency, wine companies has been accompanied by a leap
perceptions of consumers in that important export market. increasing competition in export markets and the in the quality of winegrapes being grown in
pressure to clear accumulating wine inventories the major inland regions where improved
have caused a marked decline in the average production techniques, a higher proportion of
Many in the industry are yet to develop the necessary technical skills (in viticulture and winemaking).
price per litre obtained from exports. In this premium varietals, reduced cropping levels and
environment there is a fall in export demand for a string of excellent vintages have combined to
A need for a better understanding of financial planning, cost management, business skills and super and ultra premium Australian wines. The deliver lower-priced and higher-quality fruit to
marketing to assist wineries to generate higher margins. serious impact of this trend on many smaller and the large wineries.
medium-sized producers has been recognised by
Wine Australia (formerly Australian Wine Export Challenge: To promote the consumption of
A need for a brand identity for Victorian wine.
Council) with its launch of a new ‘Wine Australia’ Victoria’s premium, super-premium and
brand for promoting premium wines to Australia’s ultra-premium wines in all markets – against
No industry-wide database that can be used for monitoring and forecasting supply and demand for export markets. This new branding and marketing a prevailing consumer trend towards
winegrapes and wine. is particularly valuable for Victoria, given the large lower-priced wines.
number of smaller producers of premium,
super-premium and ultra-premium wines.
The difficulty of gaining an export market for small producers, given the growing competition from
the other ‘new world’ and traditional producers, and the difficulties of effectively promoting Victoria’s Challenge: To accelerate the growth of
diverse wine styles in export markets. Victorian wine exports by utilising the
‘Wine Australia’ branding and participating
in associated promotions.
Overhang of cool-climate red winegrapes Red or white wine? Domestic market discounting Consolidation of liquor retailing
The shift towards purchasing winegrapes The international love affair with red wines The current oversupply of red wine and the The sharply more competitive domestic retail wine
from the three major inland regions has added identified in Vintage 2003 continues – leading to emergence of large numbers of new wine market is also a result of retail consolidation.
to the oversupply problem caused by the recent a significantly higher level of new red plantings companies and wine labels has encouraged In 2005 the two key wine retailers – entities owned
planting of premium red varieties such as Cabernet in all regions. Other than some oversupply of discounting of wine in the domestic market, by either Coles or Woolworths – controlled in
Sauvignon, Merlot and Shiraz in Victoria’s cool Chardonnay in the Murray Valley region, the a trend that is spreading to export markets. excess of 50 per cent of the Australian retail liquor
climate regions and to a lesser extent Pinot Noir. overhang of winegrapes is almost exclusively in The oversupply of red wine in the domestic market, market. This consolidation and concentration of
red grapes. While an end to the current consumer has already led to markedly higher volumes of market power will continue, through extension of
At the time of the 2005 vintage the cool climate red wine boom is nowhere in sight, domestic ‘cleanskin’ or unlabelled wines, a trend that is liquor sales into selected Coles supermarkets, the
zones accounted for 40 per cent of Australian market growth trends in Rose and lighter white strongest in Victoria where AC Neilson estimates roll out of the two principal liquor superstores –
winegrape plantings but only 20 per cent of styles are emerging. Should this trend deepen, 50 per cent of all cleanskin wines are being sold Dan Murphy’s (Woolworths) and 1st Choice (Coles)
Australian wine sales. While Victoria’s level of the importance of maintaining strong growth in (as at November 2005). – and continued acquisition of independent liquor
exposure to this is less than South Australia’s, exports would become even greater and, in the retailers. Supermarket stocking policies, highly
Victoria cannot be insulated from interstate medium term, there may be a need to accelerate This discounting cycle, along with the supply aggressive pricing and centralised purchasing,
trade in grapes and wine, especially given the new plantings of specific white varieties. of large volumes of inexpensive wine through when linked to the extensive product range and
dominance of the top four wine companies in retail outlets, is inhibiting the extent to which market power of the large wine companies, is
terms of production and share of wine sales. Challenge: To identify significant shifts in winemakers can clear stocks of premium wine at excluding smaller wineries from obtaining space
consumer demand in sufficient time to change full margins and applying pressure on producers within the retail liquor sector.
Challenge: To grow the markets for Victorian the mix of winegrape and wine production and to discount in order to gain market outlets. This
super-premium and ultra-premium wines, to adapt wine styles to meet emerging market environment also diminishes cellar-door Challenge: To grow alternative avenues to market
especially given the medium-term oversupply market demands. sales, with anecdotal evidence suggesting that for smaller Victorian producers, such as cellar-
of cool-climate red winegrapes. Strategically, consumers are choosing to purchase discounted door and other direct market channels, specialist
this is the industry’s primary challenge over wine through retail outlets rather than ordering independent wine retailers, the restaurant sector
the next five years. direct from the winery. Only a rebalancing of and niche export markets.
supply and demand will break this cycle in
Challenge: To promote the attributes of Victorian
premium, super-premium and ultra-premium
wines, including the experience of tasting and
purchasing these wines at the winery, at wine
retail specialists and at restaurants.
Strategic plan 2006–2010
Between 2006 and 2010, through implementation of this Plan the Victorian wine
industry will achieve the following goals:
Grow total sales value by 39 per cent from $1.31 billion to $1.82 billion.
Grow annual exports by 10 per cent per year from $525 million
to $845 million.
Expand annual cellar-door sales by 6 per cent per year from $228 million to
$305 million – achieving five million winery visits per year.
Grow domestic market retail sales by 5 per cent per year from $558 million
to $712 million.
For that purpose, a task force will be formed ensure that a flow of information on the ‘Wines
Objectives under the leadership of the Victorian Wine of Victoria’ brand, including information on
Industry Association and with representation wine regions and wine styles, will continually
The Victorian wine industry will pursue its key from all the organisations concerned with
Victoria’s wine branding – regional wine industry
reinforce the ‘Wines of Victoria’ positioning. The
communications program will be reinforced by
outcomes through the following objectives, each
associations, Regional Development Victoria a series of trade tastings and education events
of which has accompanying planned actions for
and Tourism Victoria. The task force will first throughout the year.
achieving the goals for the five-year
develop a brief to guide the development of the
‘Wines of Victoria’ proposition (greatest diversity Victorians will become familiar with the ‘Wines
of premium wine styles), positioning (leading the of Victoria’ branding when they take part in
Objective 1 New World in premium wine styles) and branding regular events such as the Exhibition of Victorian
tools such as a logo and slogan. Winemakers, the Federation Square Regional
Showcase series, the Melbourne Food and Wine
Grow domestic and export markets through
2. Develop and implement ‘Wines of Victoria’ Festival, and through use of the branding in
promoting a strong ‘Wines of Victoria’ brand
promotional programs that cover: Tourism Victoria’s Wine Regions of Victoria
identity (within the ‘Wine Australia’ brand) that
booklet and its website at visitvictoria.com.
recognises Victoria’s regional diversity. • Victorian wine retail and restaurant sectors.
• Victorian wine-trade education, for example The branding program will subsequently be
trade communications and trade events. extended to all Victoria’s export market activities,
• Victorian wine consumers through, for such as the annual program of wine trade
1. Form a ‘Wines of Victoria’ task force to
example, events and exhibitions. missions and export market events conducted
establish brand proposition, brand positioning
by Regional Development Victoria, new export
and branding tools. • development of Victorian wine exports through,
market activities, and inbound trade missions.
for example, Victorian export facilitation
Most Victorian wine producers rely on the programs, events and inbound promotions.
3. Implement an industry-wide communications
domestic wine market, which they access through
program to promote adoption of the
cellar-door and other direct sales, sales to Regional Development Victoria and the Victorian
‘Wines of Victoria’ brand.
restaurants and sales to the retail liquor sector. Wine Industry Association have already drafted
Melbourne is the most important market whether a strategy to assist Victorian wine producers
The success of the ‘Wines of Victoria’ branding
for wholesaling to licensed liquor outlets or for to obtain greater access to the domestic retail
will rely on its widespread acceptance and
attracting winery tourists. market through negotiating improved access for
adoption by Victorian wine producers. The
Victorian wines to the major liquor chains within
Victorian Wine Industry Association and the
Market research into boutique-scale wineries Victoria, and increasing wine trade awareness
regional wine industry associations, as industry
shows that the Barossa Valley is well ahead of of the range and attributes of Victorian wines.
custodians of the brand, need to conduct an
any other region in being acclaimed as Australia’s The new ‘Wines of Victoria’ promotional program
industry communications program to engage
leading wine region. However, the profile of can incorporate and extend this retail access
industry participants, explain the branding
Victorian wine regions is being increasingly strategy, particularly through improving product
program and recruit producers into using the
noted, particularly among younger demographics. representation for Victorian wines on the wine
brand in all their marketing activities. The longer-
To develop Victoria’s reputation as the leading lists of Melbourne restaurants and cafés. Apart
term success of the ‘Wines of Victoria’ branding
State for premium-quality, diverse wine styles, the from the cellar door, restaurants and cafés are the
will rely on widespread adoption of the branding
Victorian industry needs strong ‘Wines of Victoria’ primary market for many Victorian producers.
in all wine and winery tourism marketing and
branding that highlights Victoria’s market
continual reinforcement of its use across
leadership in premium wines and in winery A program of regular communications with
tourism destinations. the Victorian and interstate wine trade will
Grow the Victorian winery tourism market by 5. Continue to track the economic performance
becoming Australia’s leading destination for of the Victorian wine industry and engage
wine tourists. Government in supporting the continuation of
tax rebates, as necessary.
1. Review and implement programs and projected
outcomes of Victoria’s Food and Wine Tourism
Plan 2004–2007 and supplement its strategies
where necessary or appropriate.
2. Integrate the Wines of Victoria brand
into promotional programs including
those of Tourism Victoria and other
3. Implement a workshop program that covers
cellar-door management and marketing.
The improvement of service standards, distinctive
visitor experiences, and cellar-door marketing
skills have been identified as crucial for
increasing winery tourism visitation and sales
yields at cellar doors. Regional Development
Victoria and regional wine industry associations
will conduct a series of workshops to improve
members’ skills in cellar-door management
and marketing. The existing WineSkills course
modules may be adapted for these workshops,
or new programs may be developed.
4. Develop an action plan with the industry,
government, and potential investment partners
to encourage investment growth in winery
tourism within regional Victoria.
Promote to regional associations and the whole
of industry the availability of advice through
Tourism Victoria’s Investment Guidelines for
Wine Tourism, and highlight hero examples of
such investment, with particular emphasis on
distinctive cellar door experiences.
protocol is signed by the provider. The Association
Objective 3 will also encourage providers to deliver short
courses and online modules that will encourage
existing industry participants to undertake
Strengthen industry skills in viticulture, education and training programs.
winemaking, wine marketing and sales, wine
tourism and business management. 3. Work with Regional Development Victoria to
review, adapt, deliver and evaluate WineSkills
Actions course modules in business management
1. Facilitate the formation of a steering committee
with training providers to audit industry Enterprise management and product marketing
training and education courses, conduct have been identified by industry participants
gap analysis, and foster the development as priorities for education, training and skills
of new programs and online delivery development within the industry. The WineSkills
of training. programs developed by the Winemakers’
Federation of Australia to provide small and
2. Use the above committee to foster agreements medium-size winemakers with specialist expertise
with providers of education and training include modules in enterprise management and
courses to ensure industry review and marketing that could be readily adapted for
accreditation of courses, course delivery and regular delivery on a regional basis.
planned learning outcomes.
4. Review supply-chain structures within
Many courses, particularly in the vocational the industry (and other sectors) with a view to
education and training sector, have been developed identifying opportunities for network or cluster
with very limited input from the industry. arrangements to achieve greater efficiencies.
The absence of formal industry involvement in
the development of curricula, training modules The dispersed regional locations of the Victorian
and assessment of learning outcomes has led to wine industry and the predominance of small
fragmentation and duplication of course delivery production units inhibit the development of
and the delivery of training that is sometimes of a integrated and efficient supply chains. A formal
questionable standard. There is a need to establish review of alternative supply-chain structures,
an agreed protocol between the Victorian Wine and promotion of its results, would stimulate the
Industry Association and education and training development of improved operational structures
providers to ensure the following arrangements: that would deliver cost savings to producers.
• Industry accreditation of higher education Examples could be:
courses and training programs and regular • shared use of vineyard equipment.
industry review of content, training resources
• shared use of winery infrastructure and
and quality of learning outcomes
• regional agreements on standardised
• Industry review of any new training or higher
components such as bottles and closures.
education courses to assess the extent to which
it meets industry needs and has the resources • group purchasing of winemaking components,
needed to deliver the high-quality learning dry goods and services.
outcomes required by the industry. • group arrangements for packaging,
warehousing and freight consolidation.
The Victorian Wine Industry Association would
endorse only those programs or courses that meet • group arrangements for cellar-door operations.
the requirements of the protocol and for which the • group arrangements for wholesale wine sales
Improve efficiency in producing consistently would deliver an estimated $2.5 million. This In the absence of a Register of Victorian vineyards
high-quality wine grapes and wines by arrangement would mirror a similar agreement and wineries, there can be no industry-wide
achieving world’s best practice in production and negotiated in principle between the Grape and communication on any issue, including vine
environmental management. Wine Research and Development Corporation health and bio-security issues. Nor can there be
and the New South Wales Wine Industry any accurate record of plantings. Although the
Actions Association, Agriculture New South Wales, establishment of a Register of Victorian vineyards
and Charles Sturt University, through the and wineries was a stated objective within the
1. Develop a five-year plan for ‘Best Production Wagga-based National Grape and Wine Vintage 2003 Strategic Plan, and is an item of the
Practice’ based on the industry’s experience Industry Centre. Victorian Wine Industry Association’s policy, its
of programs and research conducted by the realisation is yet to occur.
• Establish a doctoral program and other
Victorian Department of Primary Industry,
research projects with Victorian universities,
the education and training sector, the Grape
through which the universities engage in
and Wine Research and Development
Corporation and the Regional Innovation and
Technology Adoption Program. • Invite Victoria’s top 50 wine producers and
regional industry associations to voluntarily
There is an urgent need to plan for increased contribute funding to either the overall
integration of industry-funded research and Program or to specific projects such as
development at State and regional levels, the sponsoring university research.
viticulture research and extension services of the • Use funding from the Grape and Wine
Department of Primary Industry and university- Research and Development Corporation to
based research. Unless such action is taken, the contribute matching industry funds to support
current resources available to the Victorian wine the Victorian Government’s maintenance and
industry will be shifted to other industries and extension of the Grapecheque programs.
may be lost to the industry forever. Such a loss
• Continue grape utilisation surveys for
would endanger the achievement of the Vintage
Victorian regions as part of the national
2010 objective of continuous improvement in
the quality of vineyard and winery production
towards achieving ‘world’s best practice’ • Encourage regional wine industry
production technologies and management. associations to set benchmarks for quality
and economic performance.
The ‘Best Production Practice Plan’, to be
• Encourage participation in national
implemented through a memorandum of
environmental management systems (e.g. the
understanding between partner organisations,
National EMS template and the Australian
will be developed along the following lines.
Wine Industry Stewardship Program) by
wineries and vineyards.
• Make arrangements to fund the Plan through
an agreement with the Grape and Wine
2. Establish a Register of Victorian vineyards and
Research and Development Corporation that
wineries to form part of a national Register.
returns 10 per cent of the Corporation’s grape
and wine industry levies and matching
Commonwealth funding to Victoria, which
Objective 5 Objective 6
Ensure the sustainability of Victoria’s wine The marketability of Victorian winegrapes, Facilitate sustainable wine industry investment
industry through continual improvement in the a crucial determinant of industry sustainability, in Victoria.
quality of production and the efficient utilisation will increasingly rely on extending
of production infrastructure. phylloxera-free status across all wine-producing Actions
regions of the State. Work is already underway
Actions to extend the Phylloxera Exclusion Zone, already 1. Attract appropriate investment
established in Henty, into the Grampians/Pyrenees through industry and Government
1. Communicate through regional associations (surveying commenced December 2005) facilitation programs.
the benefits of “world’s best practice” vineyard and Bendigo/Heathcote
management and winemaking. (commencing December 2006) areas. 2. Facilitate the development of an Action Plan to
guide investment in the wine sector over the
The sustainability of Victorian vineyards and 4. Develop an Action Plan with regional next five years.
wineries as businesses relies on a continuing associations to implement a review of the
demand for their wines, which in turn depends current Rural Use Zone planning 3. Promote this plan to the industry and engage
on continual improvement in the quality of regulations and ensure vineyards are their support for its implementation.
production and the achievement of the lowest protected from further urban encroachment,
possible costs of production. The five-year Best and promote to Government. Beyond 2007–08, when there should be an easing
Production Practice program, discussed in the of the current oversupply of cool-climate red
previous section, will guide and promote the While Rural Land Use overlays are now winegrapes and wine, it is likely that planting
adoption of ‘world’s best practice’ technologies and established in State and shire planning schemes, will recommence to meet future requirements.
management within the industry. the Victorian Wine Industry Association must While the excessive planting of the 1998–2000
continue its dialogue with the State Government period is to be avoided, an expected improvement
2. Develop an Action Plan with regional and local governments to ensure urban in the economic outlook for growers and wine
associations, Plant Health Australia, and DPI encroachment on vineyard and winery operations producers over the medium term will encourage
to implement biosecurity protocols for all is minimised. new investment in production and infrastructure.
Victorian wine regions. New investment in winery tourism infrastructure,
in particular, will be required if Victoria is to meet
Sustainable production depends on protecting the its strategic targets for growth in cellar-door
industry from phylloxera and other exotic pests trade and visitor numbers.
and diseases. While funds from the Grape and
Wine Research and Development Corporation,
an Australian Government statutory authority,
have been used to conduct regional workshops on
biosecurity protocols, a number of Victoria’s wine
regions are yet to implement these protocols.
3. Develop an Action Plan with regional
associations,Victorian and national agencies
to extend the phylloxera-free status of Victoria’s
Vintage 2010: Strategic Plan for the Victorian Neil Robb
Wine Industry 2006 – 2010 has been developed Chairman, Victorian Wine Industry Association
by a Steering Committee formed under the Promotions and Export Committee President,
auspices of the Victorian Wine Industry Pyrenees Vignerons Association Principal,
Association, with support funding provided by Redbank Winery, Pyrenees
the Victorian Government through Regional
Development Victoria. The Vintage 2010 Steering Martin Spedding
Committee comprised: President, Mornington Peninsula Vignerons
Association Principal, Ten Minutes By Tractor
Chris Pfeiffer Wine Co, Mornington Peninsula
Chair, Steering Committee
Chairman, Winemakers of Rutherglen Stephen Shelmerdine
Principal, Pfeiffer Wines, Rutherglen Treasurer, Victorian Wine Industry Association
Principal, Shelmerdine Vineyards, Yarra Valley
Astrid Adamson and Heathcote
Manager, Food and Wine Tourism,
Tourism Victoria The ‘Industry Outlook’ text uses the findings of
‘Greater Victoria Wine Grape Outlook: Summary
John Ellis 2006–2010’, produced by McGrath-Kerr Business
Chairman, Victorian Food and Wine Tourism Consultants for the Victorian Wine Industry
Council Principal, The Hanging Rock Winery, Association, a project assisted by residual trust
Macedon Ranges funds from the Greater Victoria Wine Grape
Industry Development Committee.
Chairman, Victorian Wine Industry Association The Committee thanks Dr Peter Box of Group
President, Yarra Valley Wine Growers Association Strategies for his industry workshop facilitation,
Wine industry consultant Stuart McGrath-Kerr of McGrath-Kerr Business
Consultants for industry supply-demand analysis,
Mark McKenzie and Graeme Chipp and Dale Renner and their
Chief Executive former, Victorian Wine team from Growth Solutions Group for their
Industry Association development of the ‘Wines of Victoria’ branding.
Chris Pike The Committee acknowledges the assistance
General Manager, Administration and Finance, of Ross Brown and Michelle Jordan, and the
Wingara Wine Group, Murray Darling contribution of many members of the Victorian
and Coonawarra wine industry, wine trade and wine media
who contributed to the development of this
Yasmin Power strategic plan.
Manager, Beverages, Regional
Development Victoria The contribution of Mark Mckenzie in writing
this Strategic document is also acknowledged.