This report is an industry study of the Australian Wine Industry. It examines the industry from the perspective of the wine maker.
The report examines the structure of the wine industry and identifies problems of imbalance between grape supply and utilisation, a weak bargaining power of winemakers with respect to distribution channels and low industry profitability. Key issues facing the industry are the effects of sales tax, the threat of an anti-alcohol health campaign and the opportunities provided by bouyant export markets.
Strategic groups are identified within the industry as Large Diversified, Medium Diversified, Medium Beverage, Small Premium and Boutique. The strategic variables used to defi.11e these groups are Product Diversity and Distribution Channels. Current strategies and mobility barriers of these groups are examined.
Three scenarios for the future are proposed: a continuation of current trends, a tax imposed on bulk wine as a result of a community Health Campaign, and a decrease in the current level of exports. The effects of each scenario on the strategic groups are examined, and future group strategies are suggested.
The findings of the scenario analysis are that industry pressures for rationalisation will continue, with firms in the Large Diversified group predicted to increase in size and market share, at the expense of the Medium Diversified group. Medium Diversified and Medium beverage are expected to be subject to takeover pressures as the industry continues to rationalise. The prospects for S mall Premium are good, provided consumer brand loyalty can be maintained in the face of expected reduced exports. Boutique firms should continue their presence in the industry, although the small collective size of groups will not affect the overall wine industry.