It is being reported that..
One Billion Liters of Wine Is In Storage in Australia!
Someone help with the math here because I keep looking at this number and I really am having a hard time believing it.
Is this the equivalent of more than 100,000,000 cases of wine sitting in storage in Australia?
100,000,000 plus?
And consider that the Australian Harvest is just around the corner. I can't imagine what the grape growers in that country are looking at in terms of the prices they'll get for this year's grapes.
This sort of surplus, sitting in the warehouses of a wine exporting country, affects LOTS of people. They are going to have to dump this wine on markets around the world and at prices that will be akin to giving it away. This is GREAT for consumers...but at what cost to producers. How would you like to be sitting on average California wine that you hope to sell or $10 a bottle? Yikes!
And if you are an Australian brand with lots of good brand equity in the market, you can't just lower your price on your front line brand then hope to spike the prices when the surplus is over with. By that time consumers and the market will have already become accustomed to paying much less for your wine.
Meaning, we are going to see even more "new" and "second" labels from Australian producers hit the market...and at great prices.
I'm hoping some of the experts on the Australian wine industry in the blogosphere and elsewhere will weigh in on this.
UPDATE:
Just for perspective's sake, you could give a bottle of wine
to every single person living in Australia, The United States,
France, Spain and Germany and still have more than half of
this surplus in tank.
