Wine oversupply to stay
By Wine Atlas, Wednesday 22 February 2006 :: Wine - Australia :: #106 :: rss
THE significant oversupply of wine in the Australian market could last for at least two years, McGuigan Simeon Wines Ltd said today. The winemaker's net profit tumbled 61 per cent to $6.19 million in the first half of the financial year on the back of continuing oversupply and increased competition in its markets.
McGuigan Simeon chairman David Clarke said the group expected another significant vintage this year, with an update to be provided in May.
"It is still too early in the season for accurate forecasts on the 2006 Australian vintage, but indications are that there will be another significant vintage, if not a record," Mr Clarke said.
He said the volatile market conditions added to the complexity of any forecast.
"However, we believe the traditional first-half, second-half split of profit of approximately 30 per cent – 70 per cent is broadly correct."
Advertisement: Managing director Brian McGuigan said he expected the significant oversupply of wine in the market to last for at least two years.
"The Wine and Brandy Corporation estimates there is still about 900 million litres of wine without a home, representing 60 per cent of the Australian industry's 2005 crush," he said.
Continue reading: news.com.au
