Supply chain issues hit wine exports

It’s the crisis Australian wine can’t afford following the collapse of the export market to China: the global supply chain crisis has led to rising costs and a shortage of shipping containers.

The representative bodies for Australia’s growers, winemakers and wine industry suppliers are urging businesses to plan early and work collaboratively as the industry’s supply-chain struggles to manage major disruptions and cost increases in freight and shipping.

Australian Grape & Wine and Wine Industry Suppliers Australia (WISA) are joining forces to get the message out to members and the industry.

“Like every industry reliant on sea-freight, grape growers and winemakers are feeling the impacts of freight and shipping disruptions over recent months,” said Tony Battaglene, Chief Executive of Australian Grape & Wine.

“Costs are increasing dramatically across the board and it’s proving very difficult to access spots in containers. This will have an impact on our exports in the short-to-medium-term.” s

But these concerns extend beyond securing container space for exporters. Grape and wine businesses are facing significant delays on many of the inputs they need ahead of Vintage 2022.

“It’s never been more important for grape growers and winemakers to be talking to their suppliers as early as possible ahead of the coming vintage,” said Shirley Fraser, Executive Officer of WISA.

“We want to make sure all businesses understand how major this impact will be so that we can start working together to manage the potential problems ahead of us.” said Ms Fraser. “In preparing for next vintage, businesses cannot rely on taking the usual just-in-time approach to securing the inputs they usually rely on”.

“This is a complex global problem without any easy solutions,” said Mr Battaglene. “We’ll keep working to explore potential remedies, but in the meantime we need to work together to understand the impacts of these cost increases and delays and engage with our supply-chain partners in an empathetic and collaborative way.”

Australian Grape & Wine is hosting a free Pre vintage livestreaming event on November 4, which will provide an outlook on this issue and the likely impacts of China’s tariffs on Australian wines. The organisation is encouraging all businesses along the supply chain to attend.

Australian Grape & Wine and WISA have a diverse network of members in logistics, importing and advisory, and welcome contact for those in need of connection to solutions and referral to key contacts.

Drinks industry battles “pallet-gate”

Freight and logistics issues are an increasing problem for the drinks industry, with stock and pallet shortages threatening to leave shelves empty in the lead up to Christmas.

Woolworths, Coles, pallet makers and smaller chains have formed a task force to address a pallet shortage in Australia. Without pallets, manufacturers cannot ship goods into warehouses, potentially leading to production stoppages and fewer goods for sale. 

Woolworths CEO Brad Banducci said last week: ”We started by not getting access to shipping capacity. Then there were issues about getting access to containers. And now the big issue is making sure we all get access to pallets.”

Coles CEO Steve Cain dubbed Australia’s supply chain crisis “pallet-gate” while delivering the retailer’s first quarter results for 2022.

Demand for pallets has been elevated by a surge in global consumer spending, while availability of pallets has been put under pressure by two COVID-19-related factors: demand for timber has risen during the pandemic amid a building and renovation boom, meaning fewer new pallets are being made; plus COVID-19 restrictions shut parts of Victoria’s manufacturing sector, meaning pallets were locked up in factories and not circulating.

Hail devastates Barossa wineries

The Barossa was hit by a severe hailstorm last Thursday, which has caused tens of millions of dollars damage to vineyards, market gardens, orchards and grain crops.

The size of the hailstones varied from a few millimetres to as large as a 20 cent piece.

Paisley Wines Winemaker Derek Fitzgerald said he’d never seen an event like the destructive storm.

Angaston restaurant Casa Carboni said on Instagram: “The hail damage in our region will be devastating. A quick look around Angaston and it looks like a shredder has gone through all the trees – the veggie patch looks like a blender attacked it. Can only imagine grapevines and fruit trees.”

Seabrook Wines said it had severe damage throughout the vineyard, with an estimated 40-50% loss to crop.

A grape grower in the Gomersal district, Will Holmes, told Adelaide Now: “This couldn’t have come at a worse time, everyone’s vines are pre-flowering crops, they’re probably at their most vulnerable stage to a hail event. Insurance really isn’t available for anything like this, they wont cover a vineyard for damage.”

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Categories: Business