The Oenophiliac

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Margaret River ‘worst crisis’ forces producers out


An increasing number of Margaret River grape growers are being forced to abandon the region, as plummeting demand combined with an oversupply of grapes has led to losses in the industry.

Margaret River

Margaret River: ‘crisis’

The drop in demand for premium wine from the region has resulted largely from intense competition from heavily-discounted retailer own-brand wines and the loss of demand in international markets because of the high dollar.Robert Holloway, owner of Broomstick Estate, is one of many growers in Margaret River who is struggling to survive due to rising costs, falling grape prices and a shrinking market.

‘I put our property on the market two years ago at a value of $3m. I have now withdrawn the property from the market and leased it out for two years. I know most vineyards and wineries in Margaret River are in a similar position’, he told Decanter.com.

Vanya Cullen of Cullen Wines said that the region was facing possibly the worst crisis in a generation.

‘It is a very difficult time in the wine industry now, perhaps one of the most difficult ever. It is not surprising that so many people are selling up.’

Brian Moulton, director of Western Australia property firm Acton Real Estate, said efforts to attract foreign investment to revitalise the area are being hampered by the high Australian dollar.

‘We currently have four wineries and vineyards and 14 commercial vineyards for sale. Unfortunately, sales to overseas investors are quite hard at the moment with the strong Australian currency making purchases very expensive for overseas clients.

‘However, we are receiving strong enquiry from Asia in particular China, with an average of one Chinese delegation per month’, he added.

Cullen told Decanter.com that Chinese investors have already purchased a majority share in Ferngrove Wines and Killerby Vineyards, a leading property in Margaret River.

Story by James Lawrence

Courtesy of Decanter

www.decanter.com

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This entry was posted on June 27, 2011 by in News..

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