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MELBOURNE, Australia -- Australia's severe drought could
have an upside for winemakers by reducing the wine glut, the
government's industry regulator said.
Bumper crops in recent years have left many wineries and retailers
with an excess supply, prompting them to slash prices.
The Australian Wine and Brandy Corp., which regulates and markets
the nation's 2.8 billion Australian dollar (US$2.17 billion) wine
export industry, has slashed its estimate for excess wine stocks by
more than half.
Water restrictions imposed because of the drought and frosts in
the southern grape-growing regions were eating into production and
stockpiles that have built up in the past two years, the organization
The government agency cut its estimate of excess wine stocks to
460 million liters (122 million gallons), down from a previous
estimate of more than 900 million liters (238 million gallons), and
said the industry could now be in balance in 2008-09 -- two years
earlier than previously forecast.
AWBC's manager of information and analysis Lawrie Stanford said
the weather effects were expected to cut the 2007 vintage by around
20 percent to 1.56 million tons from an average harvest of 1.94
The extreme conditions were still likely to be felt in 2008, he
"There is, therefore, prospect of another low yielding season in
2008, which could see further drawdowns of stock to a balanced
position as early as 2008-09 if export sales continue as forecast,"
Stanford said Britain was expected to remain the largest buyer of
Australian wine until 2010-11, and that the United States was
predicted to be the main driver of new demand, with a growth rate of
7 percent over the next five years.
Canada and the emerging market in China also are forecast to be
important customers, he said.
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