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Sunday, March 18, 2007

Australian Wine Industry Stress: Government Says 90% of Vineyards are Not Profitable

The head of the Australian Wine and Brandy Corporation, an Australian Government authority that helps promote wine from the nation, says that competition responsible for driving down prices is hurting vineyards.

Michael De Palma, director of the Australian Wine and Brandy Corporation, said that 90 percent of the industry is not turning a profit, with smaller vineyards hurting the most. Australia's recent growth in production has been partially blamed for a glut on the international market and depressed prices. Now imports from Italy and Spain of mid-priced premium wines is taking domestic share away from Australian winemakers.

De Palma noted that a drought and lower production during the most recent grape harvest have some vineyards considering options to exit the business.

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