For some years, those who have chosen to be on-goers have expressed the need to better understand the relationship between the farmgate value of grapes and the prices consumers pay for wine in Australia or in export markets. At the September 2016 meetings Jim Caddy presented tables, charts and graphs depicting grape and wine values in domestic and international marketplaces. He also explored many of the factors that influence dollars per tonne and cents per litre. That work has continued. A further report will be provided, detailing how and why Riverland Wine has developed closer relationships with agencies and organisations that generate much of the underpinning data and price rationale. The FADDG will comment on opportunities and risks as more winegrowers explore ways of adding value to their efforts in the vineyard.
Industry journals and publications mostly focus on premium products and values. This is positive but there is a tendency not to recognise the larger inland wine businesses that account for most of Australia’s export sales in both volume and value terms, not only as part of industry stats but also as value to the economic wellbeing regional communities.
RW is continuing to delve deeper into the data around bulk wine sales as an extension of the decade long program of ‘Know Your Numbers’ in order to best manage risks and opportunities. Cost of Production (COP) has had plenty of focus in vineyards and most members now have a reasonable handle on operating costs, gross margins and overheads. But Cost of Sales (COS) presents a whole new chapter of intrigue that must also be understood if value-chain programs are to become part of new business models for some. This is a complex and challenging area. The breakfast meetings will update members with the latest information available.
An update of what we will need to do and who we will need to work with to minimise the impact of the next big TAX challenge will also be on the agenda. It seems inevitable that influential and well-resourced lobby groups won’t rest for long following the Wine Equalisation Tax (WET) reforms. We will remain vigilant and well informed regarding Volumetric Tax arguments and likely impacts that may warrant a response, possibly before the next federal election!
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