Winemakers warned to watch production volumes

An industry analyst has warned wine producers to remain mindful of their production volumes.

The warning comes in the wake of Rabobank's wine quarterly report, which estimates the national 2013 wine harvest at 1.83 million tonnes, a 10 per cent increase on last year.

Rabobank senior analyst Marc Soccio says the industry must be wary of how much wine it can afford to produce.

He says producers targeting higher price brackets at lower volumes have experienced more success.

"We need to continue to be very mindful of how much we can afford to produce, because if we produce too much global markets are very competitive and they're becoming more and more competitive as time goes on and ... it's harder to shift that wine without having to discard it," he said.

"For the wine producers who have been willing to take a volume hit from higher prices, they have been able to actually try and restore some margin through higher produces but again you have to be able to take a hit to your volumes and not everybody can do that."

Source: ABC News, 24 July 2013