JOHN CASELLA, the boss and patriarch of Casella Wines, the Griffith-based winery that owns the Yellow Tail brand, has thrown his weight behind calls for vineyards to be ripped out to fix the oversupply facing the sector.
Mr Casella said there had to be a readjustment of grape supply to end a wine glut that has seen prices and profit margins tumble, making some operations uneconomic.
''I can't think of a non-painful way of doing it. There are going to have to be growers that will have to remove vineyards, and whether that's individual growers or portions of their vineyards it's up to the industry,'' Mr Casella said.
Last week BusinessDay reported that the managing director of Peter Lehmann Wines, Doug Lehmann, had warned 35,000 hectares of vineyards needed to be removed to restore the balance between supply and demand.
A recent industry report argued Australia was producing 20 million to 40 million cases a year more than it was selling, equivalent to 270,000 to 500,000 tonnes of grapes, or 20,000 to 40,000 hectares of vines.
Mr Casella said he believed there was about a 20 per cent discrepancy between the amount of wine produced and total sales.
''This has to change, it can't continue. We are all working as hard as we can building markets, but we [have to reform] the Australian wine industry.''
Casella Wines grew from a small family wine business in 2001 to emerge as one of Australia's most successful vineyards.
Its Yellow Tail wine is the world's fourth biggest brand and the leading imported wine in the US. Yellow Tail is the biggest Australian brand in many countries and is sold across the 40 export markets.
Casella's sales last year rose to $426.7 million from $383.85 million but net profit almost halved, to $40.64 million, as the company was not spared the troubles plaguing the wine industry.
But Mr Casella said there was some cause for optimism, especially in its key market of the US, where new varieties such as pinot grigio were countering the decline of other styles such as chardonnay. Sales of pinot grigio were experiencing double-digit growth.
He also said there could be opportunities for Australian wine in China and India.
''It will take time - it may be a five-year timetable before we see substantial volumes and sales - but it's going to be a hard sell because you are not just selling Australian wines you are selling wine to consumers that normally don't drink a lot of wine.''
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