5 February 2024
Introduction and background
The Australian Wine Research Institute (AWRI) is the Australian wine industry’s own dedicated, independent, wine-specific research institution. The AWRI is a for-purpose, not-for-profit organisation that supports a profitable and sustainable Australian grape and wine industry through world-class research, practical solutions and knowledge transfer. Established in 1955, the AWRI is governed by an industry-led, skills-based Board and is a member of the Wine Innovation Cluster located at the Waite Research Precinct in Adelaide. The AWRI is recognised as a global leader in grape and wine research and when combined with the University of Adelaide, ranks number one in the world for scientific output via peer-reviewed publications and normalised citation index rankings, important in assessing science quality and impact.
The Managing Director, Dr Mark Krstic and General Manager Business Development, Dr Tony Robinson participated in the One Grape and Wine Sector plan consultation meetings held at the following locations and dates across Australia:
- In Melbourne, Victoria, on Wednesday, 9 August 2023 at the Jimmy Watson Wine Bar in collaboration with Wine Victoria
- In Perth, Western Australia, on Thursday, 24 August 2023 in collaboration with Wines of Western Australia
- In Adelaide, South Australia on Friday 25 August 2023 in collaboration with the South Australian Wine Industry Association
- In Berri (Riverland), South Australia on Monday, 28 August 2023 at Accolade Wines in collaboration with Riverland Wine and the Australian Commercial Wine Producers
- In Mildura, Victoria on Tuesday, 29 August 2023 at the offices of Murray Valley Winegrowers Inc., in collaboration with Murray Valley Winegrowers and the Australian Commercial Wine Producers
- In Griffith, NSW on Wednesday 30 August 2023 at the offices of the Wine Grapes Marketing Board, in collaboration with the Wine Grapes Marketing Board
- In Griffith, NSW on Thursday 31 August 2023 at the offices of Miranda Wines, in collaboration with the Australian Commercial Wine Producers
- In Adelaide, South Australia, and online, on Tuesday 17 October 2023 at the offices of Wine Australia at the National Wine Centre, in collaboration with Wine Australia, Australian Grape & Wine’s Research Advisory Committee and the National Wine Research and Extension Network.
The AWRI is committed to supporting Australian Grape & Wine and Wine Australia throughout this strategic planning process and listening carefully to the input and feedback across the length and breadth of Australian wine industry stakeholders. This is crucial to help the AWRI tailor its service offering and capabilities to remain relevant and effective in supporting the Australian wine industry.
Wine Australia and Australian Grape & Wine released a draft One Grape and Wine Sector for review and comment on 9 January 2024, with feedback due by 5 February 2024.
The AWRI Board and Executive Management Group have reviewed the draft One Grape and Wine Sector plan in detail and offer the following points of feedback for consideration by Wine Australia and Australian Grape & Wine:
- Prioritisation, timeframes and resourcing – While the draft One Grape and Wine Sector plan has managed to capture the breadth and diversity of views from across the Australian wine industry, there is no sense of prioritisation, timeframes, accountability or resources required to achieve the recommended actions and outcomes. While there is broad support for the 6 themes and 23 priority areas, there are simply not enough resources available to address them all at once and there is therefore a need for clear prioritisation and clarification on responsibility for delivery. This plan needs to provide leadership to tackle the most immediate and difficult threats our industry is facing.
- Levy review and reform – The AWRI believes that the draft plan has missed a huge opportunity to consider a review of the current industry R&D and Marketing levies, explore opportunities to streamline the administration and management of these levies, and assess feasibility of potential current and future levy collection scenarios. This will be crucial in securing future research, innovation, extension, adoption and marketing/market insights capabilities for the Australian wine industry. While this may require a 10-year horizon to achieve, it is an essential step in achieving a sustainable future for our industry. Considering the ambitious goals set forth in the plan and the evident limitations of funding under the current levy system, it is imperative for the plan to address funding challenges proactively. The lack of a proposal to revitalise or restructure the funding model is a significant oversight, undermining the plan’s overall potential for success. AWRI is aligned with the views of many thought leaders within the sector that reform of the levy system is a very high priority to be addressed by Wine Australia and Australian Grape & Wine with urgency.
- No clear R&D strategy – The AWRI is concerned that while most of Wine Australia’s budget (~65%) is derived from the R&D levies, there is very little clarity on key areas for strategic investment in innovation for the Australian wine industry. Given potential reductions in R&D levies, it is important that Wine Australia develops a clear and concise R&D investment strategy, similar to other RDCs such as Grains Research and Development Corporation, Meat and Livestock Australia and Sugar Research Australia, that allows the industry to monitor and evaluate outcomes quickly. Wine Australia, Australian Grape & Wine and key research providers should be clear on their roles in supporting the development of a clear R&D strategy that will ensure a sustainable pipeline of innovation that is available and suited to the Australian grape and wine sector.
- Addressing the anti-alcohol lobby and wine’s social licence – It is concerning that issues associated with the anti-alcohol lobby and our sector’s social licence to operate are not raised as key advocacy issues for the Australian wine industry in the draft plan. Given the World Health Organization’s stated policy position on reducing alcohol consumption globally and the fundamental challenges to wine and alcohol’s place in modern society, this area should be given high priority within the plan. It would be natural for Australian Grape & Wine to lead this advocacy on behalf of the sector. Developing an advocacy strategy that aligns with global health objectives while protecting the interests of the wine sector would likely involve key components such as:
- Emphasising responsible consumption
- Highlighting sustainable practices
- Engaging in policy dialogue
- Research and innovation
- Community engagement.
- Overemphasis on increasing demand rather than addressing oversupply – The One Grape and Wine Sector plan exhibits a notable bias towards increasing demand rather than directly addressing the issue of oversupply within the Australian wine sector. This has been an ongoing issue for the sector since the early 2000s, and the document continues to encourage an open market, which has continued to lead to sustained periods of oversupply and poor return on investment and profitability. The plan places considerable emphasis on market intensification and diversification, suggesting a primary focus on expanding consumer bases, both domestically and internationally. This approach inherently leans towards boosting demand as a solution to the supply-demand imbalance. There is a noticeable lack of robust initiatives aimed at regulating or managing supply. While the draft plan acknowledges the issue of oversupply, the proposed actions primarily focus on market-driven solutions rather than direct interventions in supply management. Without measures to control or regulate production levels, efforts to stimulate demand may not sufficiently address the surplus, potentially leading to wastage, decreased profitability, and environmental concerns. The bias towards demand generation may also overlook opportunities to embed sustainability more deeply into sector practices. Addressing oversupply through limiting production could lead to more sustainable viticulture practices, reduce environmental impact, and align with global trends towards environmental responsibility. Economically, this bias has increased and will continue to increase vulnerability to international market fluctuations.
- Importance of Sustainable Winegrowing Australia within ESG – While Sustainable Winegrowing Australia is mentioned within the draft plan, its central role in supporting industry to achieve its ESG goals should be emphasised more clearly within the ESG-focused sections of the plan.
- Export market focus – Given the steady decline of the value of Australian wine exports in recent years, it would be useful for the plan to outline the role Wine Australia will play in supporting market intensification, and how Wine Australia’s efforts will complement marketing initiatives undertaken by individual companies and regional associations. There is currently a lack of clarity within the draft plan on focus areas for export market development. It will be crucial to develop a more strategic approach that identifies key markets based on potential growth, alignment with Australian wine profiles, and receptiveness to our products. There should be a clear focus by Wine Australia on comprehensive market and competitor analysis, clearly defining opportunities, priority markets and customers to maximise return on marketing investments made by Wine Australia and by companies and regions.
- Support from the Australian Government and State Governments – Given the likely impacts of an industry restructure facing many wine-growing regions across Australia, many regional and rural communities and businesses will be affected. While industry has been consulted well, effective engagement with the Australian Government and State Governments is still required to ensure that they are brought into the plan and will provide resourcing and support to industry in achieving transformative outcomes.
- Expectation management with industry – At the outset of the consultation process for the One Sector Grape and Wine plan, industry acknowledged that the sands had shifted in relation to the Australian wine industry’s strategic operating environment (e.g. exports to China, COVID, etc), and that previous plans (AGW Vision 2050 and the Wine Australia 2020-2025 strategic plan) were therefore somewhat redundant, and could benefit from a ‘refresh’. This updated One Grape and Wine Sector plan was initially sold to the industry as being transformative, noting that the red meat sector had recently developed a similar plan, which was a game changer for that sector. The Australian wine industry expected a plan that was going to show the transformative leadership and actions required to position it for future success. Stating in the Introduction on page 3 that the plan “is a high-level directional strategy for the entire sector, designed to inform the strategies, activities and priorities of the many distinct businesses and bodies that make up our sector” is not what the industry expected. It comes across as a plan to plan, and this perception will now need to be managed accordingly.
- Lack of action – The majority of the action statements in the draft plan emphasise continuing and enhancing existing activities rather than reflecting a need to change in response to the challenges that the industry faces. In many cases, action statements could be re-written in a way that aligns with SMART (Specific, Measurable, Achievable, Relevant, Time-bound) criteria and moves beyond a continuation of current activities.
- Confusing action statements – The draft One Grape and Wine Sector plan contains ~80 action statements titled ‘To do this, we will’ in boxes throughout the plan. Much of the text within these boxes lacks clarity, is imprecise and hard to interpret (e.g. ‘Continue to deliver and evolve mentoring and leadership programs across the length and breadth of the sector while prioritising equality of opportunity measures aimed at strengthening diversity and inclusion perspectives’). As such, the plan would benefit from a simplification of the text of many of these action statements to make the proposed actions easier to understand and evaluate.
- Omission of AWRI – While the draft plan outlines the collective goals and directions for our sector, it is considered important to address an obvious gap in the documentation – the explicit exclusion of the Australian Wine Research Institute (AWRI) from key sections of the Plan. Given AWRI’s significant role as industry’s own research and extension organisation, backed by substantial investment from Wine Australia through industry levies, its absence in the list of key sector bodies supporting the success of the grape and wine sector (page 11) is a notable gap. Given the track record and critical role of AWRI in driving research and innovation for the sector for nearly 70 years, its inclusion in the plan is not just a matter of acknowledgment but a reflection of the comprehensive and collaborative approach required for a successful sector in the future. The AWRI’s expertise and human capital contribute to the sector’s growth, innovation, and adaptation to challenges, aligning closely with the plan’s long-term vision for a resilient, profitable and sustainable grape and wine business. In addition, given AWRI’s active participation in the industry consultation meetings held across Australia, not to be acknowledged on page 46 is an oversight that should also be addressed.
The AWRI appreciates the opportunity to contribute to the One Grape and Wine Sector draft plan and anticipates significant revisions in the final version to reflect input from the broader sector. If additional detail or clarification on any of the issues and comments raised would be useful, we would welcome the opportunity to provide it. The AWRI is committed to ensuring that the final One Grape and Wine Sector plan robustly addresses the sector’s needs and stands ready to assist in refining it further.