australian wine and brandy corporation

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Australian Wine and Brandy Corporation ANNUAL REPORT 2006–2007

Australian Wine and Brandy Corporation

Annual Report 2006–2007

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The Australian Wine and Brandy Corporation gratefully acknowledges the support of the following Partners

Published by:

Australian Wine and Brandy Corporation National Wine Centre – Industry House Cnr Hackney and Botanic Roads, Adelaide, SA 5000

Postal Address: PO Box 2733, Kent Town, SA 5071Telephone: +61 8 8228 2000Facsimile: +61 8 8228 2022E-mail: [email protected]: www.wineaustralia.com

© Australian Wine and Brandy Corporation 2007

ISSN 1442–9535

This work is copyright. Textual information in this report may be reproduced in whole or in part, provided the information is not sold or used for commercial benefit and its source (“Australian Wine and Brandy Corporation 2006–07 Annual Report”) is acknowledged. Reproduction of text for other purposes, and storage or reproduction of any photographs or other graphical material in the report for any purpose is prohibited without the prior written permission of the Australian Wine and Brandy Corporation.

Annual Report 2006–2007 �

26th Annual Report for the year ended 30 June 2007


2 Australian Wine and Brandy Corporation

� October 2007

The Hon Peter McGauran MP Minister for Agriculture, Fisheries and Forestry Parliament House CANBERRA ACT 2600

Dear Minister

On behalf of the members of the Australian Wine and Brandy Corporation, I am pleased to present the Corporation’s 26th Annual Report, covering the year ended 30 June 2007, for tabling in both Houses of Parliament.

The highlight of the year was the release of Wine Australia: Directions to 2025 in May 2007. The product of eighteen months of intense research and consultation, Directions to 2025 provides a comprehensive blueprint to assist Australian wine in achieving a sustainable return for its grape growers and wine producers.

Under section 9 of the Commonwealth Authorities and Companies Act 1997, the Members of the Corporation are responsible for the preparation and content of this report of operations in accordance with the Commonwealth Authorities and Companies (Report of Operations) Orders 2005.

The report of operations was made in accordance with a resolution of the Members of the Corporation on 23 August 2007.

Yours sincerely

Hon John Moore AO Chairman

Annual Report 2006–2007 3

To achieve its market potential, Australia’s wine businesses must be sustainable in the broadest sense of the word.

Kate Goodfellow Compliance Officer

CHAIRMAN’S REPORT 4CHIEF EXECUTIVE’S REPORT 6OVERVIEW 9Our mission 9

What we do 9

Enabling legislation 9

Responsible minister �0

Stakeholders and clients �0

Planning and reporting framework �0

YEAR IN REVIEW 13Market Development �3

Knowledge Development �8

Compliance 22

Trade 25

Geographical indications 28

Financial results 29

Regional reports 30

THE ORGANISATION 33Statement on governance 33

Members of the Corporation 34

Annual General Meeting of the industry 36

Board and committee membership and attendance at meetings

37

Organisational structure 39

Administration 40

THE WINE INDUSTRY 42World wine production 42

World wine trade 43

Australian wine production 44

Australian domestic market 46

Australian wine exports 47

Outlook for Australian wine 49

FINANCIAL STATEMENTS 51APPENDICES 81Appendix � Corporate directory 82

Appendix 2 Wine industry statistics 86

Appendix 3 Glossary of term and acronyms �05

Appendix 4 Compliance index �06

Appendix 5 Alphabetical index �07


MEMBERS OF THE CORPORATION

Angus Kennedy – Deputy Chairman Michael De Palma – Member Caroline Dunn – Member Sam Tolley – Chief Executive Hon John Moore AO – Chairman

CHAIRMAN’S REPORT It is my pleasure to report on a year in which the Corporation truly highlighted its value to the Australian wine sector.

The release of the Wine Australia: Directions to 2025 industry strategy and the roll out of an exciting new marketing strategy under the Wine Australia banner were two of the most important initiatives in recent years. These initiatives have set the framework to assist Australia’s winemakers and grape growers to reach their enormous potential.

Directions to 2025 got the headlines, and rightly so. After more than �8 months’ work, the final report and supporting Information Resource Kit released in Sydney in May 2007 met even the highest expectations and proved once again what can be achieved when the wine sector works together with a clear and realistic focus.

A joint initiative with the Winemakers’ Federation of Australia, Directions to 2025 had the full support of the national, state and regional wine organisations and, importantly, the enthusiastic backing of most of our 7,000-plus grape growers and 2,000-plus wine producers.

The aim was to create a comprehensive blueprint for Australian wine to achieve a sustainable return for those growers and producers and that is what was delivered. Directions to 2025 offers a broad and sustainable strategy based on a clear

understanding of such matters as market change, business planning and environmental necessities.

It is, as Directions taskforce chairman Mr Kevin McLintock put it, a “document for these times”. It will help participants to adopt the most effective and efficient practices and to expand their businesses based on sustainable, long-term principles. It engages the teaching institutions that underpin our future excellence and embraces the development of future industry leaders. The report has been well received and all involved are delighted at how quickly things have started to happen.

The same could well be said of our new Wine Australia brand segmentation strategy, which is already changing the way the world thinks about Australian wine. By presenting our diverse offering under four clear sub-brands, or “personalities”, that provide both direction and an invitation to explore, Australia is once again taking the lead in wine marketing innovation.

The successful implementation of these strategies is dependant not only on the enthusiastic support of the sector but the injection of additional funds. The Corporation is currently working with the industry to identify some additional revenue streams.

The Corporation’s international marketing initiatives are underpinned by its extensive knowledge base and analytical capability and this was substantially broadened during the year. Similarly, the


Angus Kennedy – Deputy Chairman Michael De Palma – Member Caroline Dunn – Member Sam Tolley – Chief Executive Hon John Moore AO – Chairman Mark Purbrick – Member Geoff Gorrie – Member Leon Deans – Member Andrew Moore – Member Jock Osborne – Corporation Secretary

The achievement of a financial surplus for the year in such a difficult trading environment positions the Corporation well for what promises to be an equally challenging year ahead.

I congratulate Penfolds and its 2003 RWT Shiraz for winning the prestigious George Mackey Memorial Trophy for 2005–06. The trophy, named after a former Corporation chairman, is awarded annually to the most outstanding wine exported during the year.

The 2003 RWT Shiraz was selected from record number of wines submitted for export approval and assessed by the Corporation’s panel of inspectors during the year. It is a great wine and a very fine ambassador for our industry.

To conclude, I must thank Kevin McLintock and the Directions team for producing such a far sighted and comprehensive strategy and Sam Tolley and his staff for such a productive year in such challenging circumstances.

Hon John Moore AO Chairman

Corporation’s compliance work is fundamental to ensuring that our products can be marketed globally in the knowledge that they are sound and merchantable.

There are still many challenges ahead, however, and the combined impact of frost and sustained drought during the year highlighted once again how industries such as ours are subject to the vagaries of Mother Nature. The Corporation contributed to the work of a Drought Management Taskforce, established to provide the information individual grape growers and winemakers need to plan the way ahead. It is clear that water is an issue that cannot be ignored.

Some in our industry are still hurting and there are pressing issues to be addressed. At the same time there are real positives in the continuing quality and popularity of Australian wine. As the 2006–07 financial year ended, we were tantalisingly close to seeing annual exports reach $3 billion for the first time. That is an impressive performance given the tough trading conditions created by the ongoing impact of increasing global competition and retail consolidation.

Tough times in the industry also impacted the Corporation’s income. However, I am delighted by the way Sam Tolley and his team were able to adapt during the year and to effectively and efficiently carry on our core business while also delivering the major initiatives highlighted above.


MANAGEMENT TEAM

Ernie Sullivan – Chief Financial Officer Paul Henry – General Manager Market Development Jock Osborne – Corporation Secretary Kate Palmrose – Executive Assistant

CHIEF EXECUTIVE’S REPORTAs highlighted in the Chairman’s Report, the major activity for the year was the completion and release of the Directions to 2025 industry strategy, which involved the largest and most complex data gathering and analysis project in the Corporation’s history.

At the heart of Directions to 2025 are the detailed Market Insight Reports prepared for �� of Australia’s top �5 markets, which accounted for just over 90% of export volumes in 2006–07. This significant undertaking highlighted once again the Corporation’s established strengths in this area. The many staff members involved with Directions to 2025 are to be congratulated on their efforts and ideas and for the cooperative way in which they worked with industry colleagues.

Complementing Directions to 2025 was the continuing rollout of a repositioned and refreshed Wine Australia marketing initiative, including a new segmentation strategy designed to communicate the diversity of Australia’s wine offering. The strategy involves promoting wine under four distinct sub-brands which act as signposts to direct Australian producers to where they fit into the Wine Australia proposition and guide the trade, media and consumers to an Australian product that meets their needs. Feedback has been extremely positive.

Both Directions to 2025 and the Wine Australia strategy feature prominently on the Corporation’s new website, which was

launched during the year after more than twelve months’ development. To reinforce the Wine Australia message, corporate, consumer and overseas information are now accessed via a single website and both the navigation and the content of the site have been revised and given a contemporary look and feel. Interest has been strong, with around 35,000 hits a month being recorded since the relaunch, rising to more than 50,000 following the release of the Directions to 2025 strategy. Information on the international sites is available in Mandarin Chinese, Dutch, German, Japanese and Korean.

The following is a brief summary of other operational achievements.

Market Development

In line with the imperative to explore new markets for Australian wine, a comprehensive three-year Emerging Markets Strategy was developed.

Our successful Market Programs were expanded in size and scope to include more membership categories and online registration. Collaborative marketing programs were successfully delivered in �4 countries.

As part of a stronger online presence, the successful Australia: world class education site was made available in seven languages and contemporary innovations such as podcasting were introduced.


Ernie Sullivan – Chief Financial Officer Paul Henry – General Manager Market Development Jock Osborne – Corporation Secretary Kate Palmrose – Executive Assistant Sam Tolley – Chief Executive Steve Guy – General Manager Compliance and Trade Lawrie Stanford – Manager Information and Analysis

The number of wines submitted for export approval again rose to a new record of �8,�69 and a fifth weekly evaluation session had to be scheduled to meet demand.

A major upgrading of the online Wine Export Approval system began and had reached the testing phase at year’s end.

TradeThe Corporation contributed to two important milestones during the year. The World Wine Trade Group Agreement signed in January 2007 will facilitate wine labelling arrangements with three of Australia’s largest trading partners, while the bilateral agreement with the EU, which was initialled in June 2007 and is expected to come into force during 2008, will provide Australian winemakers with more flexibility in trading with Europe.

The online Export Market Guide was updated and relaunched in October 2006 and has been praised as setting an international benchmark for market intelligence.

Fraud controlAs required by the Commonwealth Fraud Control Guidelines 2002, I certify that the Corporation has undertaken a fraud risk assessment, has prepared a fraud management plan and has put in place appropriate fraud prevention, detection, investigation, reporting and data collection procedures that meet the specific needs of the Corporation and comply with the guidelines.

One incident of fraud was detected during the year and the matter has been referred to the police for prosecution. The prompt detection of this incident demonstrated the effectiveness of the Corporation’s procedures, however an independent review was commissioned and some changes were implemented to prevent a recurrence.

StaffIn response to the decline in revenue this year and in anticipation of a similar situation next year, action was taken to reduce costs and to build up financial reserves, without impacting too heavily on the services provided. The Corporation’s operating structure was reconfigured to reduce administrative cost resulting in some staff redundancies.

I extend my thanks to all staff for continuing to provide an efficient and effective service to the wine sector in such a challenging environment.

Sam Tolley Chief Executive

Knowledge Development

The Directions to 2025 and web delivery projects dominated the year, but significant progress was made on the forthcoming redevelopment of the WINEFACTS database and a drought modelling capability was introduced in partnership with the Winemakers’ Federation of Australia.

The Corporation enhanced its reputation as the leading provider of information and analysis for the wine sector, publishing a range of reports covering wine grape and wine production, grape crush, domestic sales, imports and exports and answering more than 3,300 individual enquiries.

An additional analyst and a survey coordinator were employed during the year, reflecting the increased demand for services and support in this area.

Compliance

I am pleased to report that there were no significant incidents that reflected adversely on the reputation of Australian wine in 2006–07. A problem arose with an export shipment to China but prompt action by the Corporation, including the suspension of the exporter’s export licence, resolved the issue without significant long-term damage.


Rodney Cargin Analyst

Directions to 2025 is underpinned by the gathering of accurate market intelligence which is to be made available throughout the Australian wine sector.


The Australian Wine and Brandy Corporation is a statutory authority established in �98� to provide strategic support to the Australian wine sector. Its responsibilities include:

• Export regulation and compliance

• Domestic and international wine promotion

• Wine sector information and analysis

• Maintaining the integrity of Australia’s wine labels and winemaking practices

• Protecting the names of Australia’s wine producing areas

• Assisting with negotiations with other countries to reduce trade barriers.

The Corporation’s role in maintaining and developing markets, protecting quality and reputation, and providing information and analysis to enable better decision making, has been crucial to the sector’s growth over many years. In today’s challenging global trading environment, that strategic support becomes even more critical.

OUR MISSION

To enhance the operating environment for the benefit of the Australian wine industry by providing the leading role in:

• Market Development

• Knowledge Development

• Compliance

• Trade

WHAT WE DO

Market Development – Growing the markets

The Corporation takes the lead role in the strategic marketing of Australian wine overseas, including the identification of markets and the implementation of strategies and activities in each market. It has Wine Australia offices in the United Kingdom, the United States, Canada, Ireland, continental Europe and Japan.

Knowledge Development – Better decision making

The Corporation is recognised as the first point of contact for wine sector information and analysis in Australia, delivering key industry assessments as well as general data and information for the broader community.

Compliance – Maintaining the reputation

The Corporation’s regulatory activities are aimed at preserving Australia’s internationally recognised reputation for quality and integrity. This includes licensing exporters, issuing permits for

Australian wine and brandy exports and running a label integrity program to prevent false or misleading labelling.

The Corporation protects the integrity of Australia’s wine producing areas, maintains the Register of Protected Names and supports the Geographical Indications Committee, a statutory committee established to define the grape producing regions of Australia.

Trade – Better market access

The Corporation works to increase Australian wine exports by assisting the sector with market access issues, working to reduce trade barriers and developing a comprehensive understanding of regulatory requirements in key markets.

ENABLING LEGISLATION

As an Australian Government statutory authority established under the Australian Wine and Brandy Corporation Act, 1980 (the “Act”), the Corporation’s objects, functions and powers are set out in the Act and the Australian Wine and Brandy Corporation Regulations 1981 (the “Regulations”).

Objectives

The objects of the Act are:

• To promote and control the export of grape products from Australia;

• To promote and control the sale and distribution, after export, of Australian grape products;

• To promote trade and commerce in grape products among the States, between States and Territories and within the Territories;

• To improve the production of grape products, and encourage the consumption of grape products, in the Territories;

• To enable Australia to fulfil its obligations under prescribed wine-trading agreements;

• For the purpose of achieving any of the objects set out in the preceding paragraphs:

– to determine the boundaries of the various regions and localities in Australia in which wine is produced;

– to give identifying names to those regions and localities; and

– to determine the varieties of grapes that may be used in the manufacture of wine in Australia;

• To advance the objects of the Act by helping to ensure the truth, and the reputation for truthfulness, of statements made on wine labels, or made for commercial purposes in other ways, about the vintage, variety or geographical indication of wine manufactured in Australia; and

OVERVIEW

�0 Australian Wine and Brandy Corporation

• To regulate the sale, export and import of wine:

– for the purpose of enabling Australia to fulfil its obligations under prescribed wine-trading agreements; and

– for certain other purposes for which the Parliament has power to make laws.

Functions of the Corporation

The Corporation’s functions relate to defined grape products that comprise Australian wine, brandy, grape spirit and products derived in whole or in part from grapes that have been declared by the Regulations to be grape products.

The Corporation’s functions are:

• To promote and control the export of grape products from Australia;

• To encourage and promote the consumption and sale of grape products both in Australia and overseas;

• To improve the production of grape products in Australia;

• To conduct, arrange for, and assist in, research relating to the marketing of grape products; and

• Such other functions in connection with grape products as are conferred on the Corporation by the Act or the Regulations.

The Geographical Indications Committee’s function is to make determinations of geographical indications for wine in relation to regions and localities in Australia.

Powers of the Corporation

The Act gives the Corporation the power to do all things necessary to be done in connection with the performance of its functions.

RESPONSIBLE MINISTER

The Corporation is responsible to the Minister for Agriculture, Fisheries and Forestry (the Minister) and through the Minister to Parliament. The responsible minister at the date of this report and for the year under review is the Hon Peter McGauran MP.

STAKEHOLDERS AND CLIENTS

The Corporation’s primary stakeholder is the Australian Government. Other principal stakeholders are the wine and brandy producers who pay the Wine Grapes Levy and the exporters who pay the Wine Export Charge. The Corporation draws the bulk of its revenue from these levy payers, who have the right to vote at its Annual General Meetings.

Other stakeholders include:

• The national, state and regional wine and brandy producer associations; and

• Winegrape growers and their national, state and regional associations.

The clients that utilise the Corporation’s services include:

• Wine and brandy exporters – export promotional material, assistance in overseas markets, export licences, export documentation and approvals, information;

• Wine and brandy producers – label integrity assistance, domestic promotional material, information;

• Grape growers and their regional associations – geographical indication registration, information; and

• Wine research organisations, wine sector suppliers and consultants, academics and students, lawyers, financial institutions, businesses and the public – information.

PLANNING AND REPORTING FRAMEWORK

The Corporation must prepare three- to five-year Corporate Plans and Annual Operational Plans.

Corporate Plan

The Corporate Plan for the three years ending on 30 June 2009 was approved by the Minister on 7 June 2006. There were no variations to the Corporate Plan that must be disclosed pursuant to sections 3�B or 3�C of the Act.

Annual Operational Plan

The 2006–07 Annual Operational Plan, approved by the Minister on 7 June 2006, sets out the actions to be taken during the year in order to give effect to the matters set out in the Corporate Plan. There were no variations to the Annual Operational Plans that must be disclosed pursuant to section 3�H of the Act.

Statements of Expectations/Intent

In May 2007 the Minister provided the Corporation with his initial Statement of Expectations as required by the Government following the Review of the Corporate Governance of Statutory Authorities and Office Holders.

The Corporation has responded with a Statement of Intent and both documents are available on the Corporation’s website.

The Statement of Intent is consistent with the Annual Operational Plan for 2007–08 and the Corporation will report on progress with its implementation in next years’ Annual Report.

Annual Report

Achievement of the Annual Operational Plan actions is reported in the Year in Review section of this Annual Report.

The Corporation is subject to the Commonwealth Authorities and Companies Act, 1997 (the “CAC Act”) and this Annual Report is prepared in accordance with the requirements of that act.

OVERVIEW (CONTINUED)

Annual Report 2006–2007 ��

Australia’s key opportunities are to increase its sales by growing alongside price points that are themselves growing and by fostering the market’s expansion at higher price points.

Prue Irish Marketing Officer – International Visits


Grape growers and winemakers need to adopt a range of initiatives to enable the sector to continue to build profitable and sustainable markets.

Michael Kelly Finance Officer

Annual Report 2006–2007 �3

MARKET DEVELOPMENT

The Corporation’s activities in the year under review were delivered in line with:

• The objects set out in the Act;

• Its mission statement;

• The strategies set out in the Corporate Plan for 2006–09; and

• The actions set out in the 2006–07 Annual Operational Plan (AOP) to help achieve those strategies.

ACTIVITIES

Wine Australia brand development

The launch of a new segmentation strategy to communicate the diversity of the Australian wine offering continued the rollout of a repositioned and refreshed Wine Australia brand that commenced last year.

Endorsed by Directions to 2025, the aim is to accommodate the range of wine consumers through a simple application of a new, segmented brand platform that identifies four separate Australian offers and four distinct market opportunities. Each category acts as a signpost to direct Australian producers to where they fit in to the Wine Australia proposition and to guide the trade and media to an Australian product that meets their business needs.

• Brand Champions – Australian wines that appeal through accessibility, ease of enjoyment and a strong premium brand message about product and country.

• Generation Next – Australian wines driven by innovation (marketing; product; packaging) that appeal to consumers who primarily drink wine for social occasion and/or peer group affinity, rather than for wine attribute.

YEAR IN REVIEW

Output: To create a market environment that enhances the global demand for Australian wine.

Key Performance Indicator: Enhanced demand for Australian wine in line with projected export sales target of $4 billion by 20�0.

2006–07 Result: Export sales of Australian wine rose 7% on the previous year to $2.99 billion, in line with KPI expectations.

STRATEGY #1Develop and implement Wine Brand Australia marketing initiatives in targeted overseas markets highlighting the stylistic, varietal and regional diversity of the offering.

AOP ACTIONS�. Implement specific marketing programs in each of the

identified key markets for Australian wine.

2. Implement an international visitors program for key wine media and trade representatives.

3. Implement Australia: World Class as an international educational program for Australian wine.

4. Support Wine Australia International 2006 as a major showcase for Australian wine.

5. Work collaboratively with key partners to develop and align Wine Brand Australia marketing initiatives.

6. Utilise the Corporation’s websites as a marketing tool to target specific user groups in selected countries.

7. Review the structure and membership of the overseas marketing programs.

OUTCOMETo enhance the operating environment for the benefit of the Australian wine industry

OUTPUT �Market Development

OUTPUT 2Knowledge Development

OUTPUT 3Compliance

OUTPUT 4Trade


YEAR IN REVIEW (CONTINUED)

• Regional Heroes – Wines from somewhere rather than anywhere. Australian wines that add and sustain interest for consumers by fostering a clear association between region and variety/style.

• Landmark Australia – High profile, distinguished Australian wines built on inherent quality and world class reputation.

Market programs

Market Programs were run in �4 key export markets in collaboration with industry partners, allowing exporters to present their products to key targets under the Wine Australia banner while helping to reinforce the Australian wine category in those markets. Individual programs were restructured to enable activities to be developed in accordance with the new segmentation strategy.

To increase the appeal of the Market Programs the new format included an expanded range of membership categories and online registration and considerable time was spent publicising these features to new and potential members. All initiatives were well received.

Australia: world class

A core part of the broader Wine Australia strategy, Australia: world class aims to provide knowledge and interest across the major disciplines involved in the making, marketing and communication of 2�st century wine production. Balancing accepted wisdom, innovative new research and compelling practical case studies, it is a powerful tool for wine education for consumers, trade and media.

This successful online education platform is now available in seven languages and has gained international recognition. During the year it was endorsed by the UK’s Wine and Spirit Education Trust and adopted by the American Society of Wine Educators, the world’s largest education provider, for delivery to over �50 wine educators.

The Corporation also partnered with QANTAS to develop an accredited, four-level staff training program based on Australia: world class and 700 flight crew members have already completed the beginners’ course.

Enhanced website

The Corporation’s new website includes entry pathways for users from specific regions of the world, a greater emphasis on the promotion of Australian wine and wine regions, and a range of new resources, including an international events calendar, an image library and podcasting. Australian wine writer Max Allen recorded 22 segments from his book Crush for podcasting via the site, and these have been downloaded more than �0,000 times.

International visitors program

The Corporation arranges and hosts visits by international media, key trade representatives, wine educators, sommeliers and other influential wine personalities as targeted by its Wine Australia

offices. During 2006–07, �25 visitors were hosted, including 46 from the UK and Ireland, �4 from the US, three from Canada, 30 from Continental Europe, 24 from Japan and eight from emerging markets.

Wine Australia International 2006

Wine Australia International is Australia’s principal domestically focussed consumer and trade exhibition. The Corporation provided sponsorship for the July 2006 event in Sydney, ran a number of meetings and seminars, arranged itineraries for international visitors and hosted the International Lounge for visiting trade and media.

Wine Australia Export Partnership

An exclusive sponsorship program open to companies who supply or service the wine sector on a national and international level, the Wine Australian Export Partnership recognises the mutual objectives of wine companies and their suppliers and supporters in continuing the growth in Australian exports.

The Corporation and the wine sector acknowledge the support provided by the partners in growing the market for Australian wine.

Wine Australia offices

Reports from the Corporation’s six overseas Wine Australia offices are included later in this report.

STRATEGY #2Research embryonic and emerging market priorities, particularly the key embryonic markets of eastern Europe, Russia, China, India and Korea.

AOP ACTIONS�. Analyse available market intelligence to identify commercial

opportunities in emerging markets for Australian wine and prepare strategies to address those opportunities.

2. Prepare a detailed users’ guide to assist exporters to embryonic and emerging markets.

ACTIVITIES

Emerging markets

The need to explore and invest in emerging markets is recognition of Australia’s maturing category growth in key export markets.

A three-year strategic plan to identify potential markets for growth in Australian wine sales and to defend existing markets was released during the year. The strategy seeks to effectively communicate Australia’s market opportunities through a comprehensive program of support focused on trade and media, tailor made educational initiatives and regular communication to relevant international contacts and the Australian wine sector.

Annual Report 2006–2007 �5

James March Executive Officer

– Communications

It is imperative that making Directions to 2025 a reality is characterised by unprecedented levels of focus and cooperation across the sector.


Wine Australia, the AWBC’s global marketing platform, has developed a new brand segmentation strategy based around the four “personalities” of Australian wine.

Belinda Hamlyn Marketing Officer

– Domestic


Growth markets include China; where Australian bottled wine exports are expected to exceed bottled wine exports to Japan in 2007, South Korea; where Australia is poised to achieve further penetration into one of the most sophisticated and affl uent regions in the North East Asia region, and Russia; an economic powerhouse.

In addition, a strategy has been developed to maintain Australia’s relatively successful position in low to medium growth markets, including Hong Kong, Singapore and India.

Exporter assistance

A dedicated web presence for emerging markets was established on the Corporation’s website for the assistance of exporters and as mentioned elsewhere, a revised Export Market Guide was launched to assist exporters grappling with the complexities of exporting wine.

STRATEGY #3Develop and implement an effective domestic promotional strategy designed to encourage infrequent wine consumers to switch their alcoholic beverage preferences to wine.

AOP ACTIONS1. Consult with Australian wine producers and retailers to identify

opportunities to implement the recommendations of the infrequent wine consumer strategy and to identify the means to fund it.

ACTIVITIES

Domestic promotion

The Directions Task Force consulted extensively with wine producers on a strategy to encourage infrequent wine consumers in Australia to switch their alcoholic beverage preference to wine. This consultation built on the research undertaken in the previous year by the Domestic Promotion Taskforce.

On-line wine marketing tools are available to assist regions and retailers with their promotional activities and the Corporation collaborates in domestic promotional activity when appropriate opportunities arise.

Domestic promotion is recognised as a priority to be implemented when a suitable source of wine sector funding is identifi ed. A costed proposal has been developed for the industry’s consideration and possible implementation in 2008–09.

STRATEGY #4Ensure overseas diplomatic missions can promote Australian wine by providing access to wine via the Australian Wine Overseas (AWO) program.

AOP ACTIONS1. Review the offering and scope of the AWO program.

2. Investigate further automation of internal systems and review supplier arrangements to improve service delivery.

ACTIVITIES

AWO program continues

The Australian Wine Overseas program (AWO) provides a unique promotional opportunity by giving Australian and foreign overseas diplomatic posts access to Australian wines.

The AWO program was established when it was diffi cult to obtain Australian wine in many countries, but as Australian wine has become more freely available, the value and role of the program must be reassessed. A review planned for 2006–2007 was deferred due to staffi ng changes.

More than 5,650 cartons were sent to Australian and foreign diplomatic posts during the year, particularly in Asia and other emerging markets.



STRATEGY #1Increase available knowledge through an integrated approach to global wine intelligence gathering and analysis that includes economic, political and market information.

AOP ACTIONS1. Improve the information exchange between the Corporation’s

Australian and overseas offi ces.

2. Source foundation data on global consumer wine trends in key overseas markets.

3. Provide analysis and identify opportunities for growth in Australian wine sales in established and emerging markets to underpin the development of a strategic plan for the Australian wine sector.

ACTIVITIES

Global wine intelligence

Directions to 2025 provided the impetus for a major program of market intelligence gathering in 2006–07.

A range of data was acquired covering a broad range of sales performances and need-to-know factors infl uencing sales in Australia’s major markets. In addition, competitor activity was analysed and consumer purchasing characteristics examined.

Analysis of the data enabled the Corporation to identify target opportunities for Australian wine. For the fi rst time, reports containing in-depth analysis of market prospects and opportunities were prepared for eleven of Australia’s top fi fteen markets – that account for just over 90% of Australia’s export volumes in 2006–07. These publications, called Market Insight Reports,

were delivered to Corporation levy-payers and national industry organisations and executive summaries of the reports were made available in the public-domain. Reports for Australia’s priority emerging markets; China, South Korea and Russia, were commenced for delivery during 2007–08.

The Corporation acknowledges the fi nancial assistance for the purchase of global wine data provided by the Grape and Wine Research and Development Corporation and the Department of Agriculture, Fisheries and Forestry.

Overseas offi ce input

Overseas offi ces provided input to the Market Insight Reports and were updated constantly through regular online communications and visits by key Corporation personnel during the Directions to 2025 process. A conference for overseas managers was convened in Australia in April 2007 in the lead up to the May Directions to 2025 launch.

STRATEGY #2 Develop a strategic plan for the Australian wine sector.

AOP ACTIONS1. Consult widely with the wine sector on the development of a

strategic plan for the Australian wine sector.

2. Prepare and publish the Directions for the Australian Wine Sector strategy and communicate it to stakeholders.

Output: To support the Australian wine sector’s competitiveness through the collection, interpretation and dissemination of global wine sector intelligence.

Key Performance Indicator: The Corporation to be respected by wine industry decision-makers as the pre-eminent provider of wine sector information and analysis.

2006–07 Result: The Directions to 2025 strategy and complementary Information Resource Kit were widely recognised as one of the most signifi cant contributions to industry knowledge and planning in many years.

KNOWLEDGE DEVELOPMENT


ACTIVITIES

Creating Directions

The product of 18 months of intense research and consultation, Wine Australia: Directions to 2025 was launched in May 2007 as a comprehensive blueprint for Australian wine.

Through the past decade, Australian wine has become subject to a signifi cantly more competitive global trading environment, has been confronted by an imbalance between its supply and its demand, and has experienced the realities of climate change and scarcity of water. Against these, the sector has worked diligently to meet the demanding expectations of its major international markets and has seen the value per litre of its export and domestic sales decline in a dramatically altered market environment.

As a self-reliant sector that drives its own destiny, it must continue to anticipate and adapt to changing market needs and conditions.

A joint project with the Winemakers’ Federation of Australia, Directions to 2025 clarifi es the environment in which Australia is making and trading its wine. It sets a measurable course for the future, maintaining the vision behind Strategy 2025 and its unprecedented success. Strategy 2025 called for value growth between 2002 and 2015 and Directions to 2025 answers that call.

A dedicated website was created to deliver the range of materials generated by the Directions to 2025 project. The material was made available at no charge but was located in either a public-domain section of the website (fi nal Directions to 2025 report and an extensive Information Resource Kit) or a restricted, password-protected section for levy payers (Market Insight Reports and a Gross Margin Ready Reckoner).

STRATEGY #3 Improve the means for disseminating information including the Corporation’s websites, the online WINEFACTS Statistics and WINEFACTS Information Search, and the Wine Australia Magazine.

AOP ACTIONS1. Publish Wine Australia Magazine as a ‘must-read’ source of

information for the wine sector.

2. Use the Corporation’s websites, incorporating WINEFACTS Statistics and WINEFACTS Information Search, as vehicles for the integrated delivery of the range of information gathered throughout the Corporation.

3. Increase ease of WINEFACTS access through continued development of user interface and targeted product packaging/delivery.

4. Based on client market research, review the range of information products offered and their pricing and accessibility.

5. Communicate to external clients the availability of analytical and information products/services available through the Corporation.

6. Build existing subscription base through identifi cation and targeting of potential user groups.

ACTIVITIES

Information dissemination

A range of reports covering wine grape and wine production, grape crush, domestic sales, imports and exports were published during the year. WINEFACTS, the online data warehouse, was the principle mode of delivery but some hardcopy publications were also produced.

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More than 3,300 enquiries from around 3,000 individuals were answered during the year – 90% of them within 24 hours – the majority from exporters and wine sector members.

Monthly email communications inform levy payers about new information products, data updates and the availability of analytical and information products and services.

WINEFACTS development

The WINEFACTS website has been reviewed and mapped for redevelopment, with a focus on improved ease of navigation, redesign of the report builder tool, new user recognition features and custom areas which highlight user benefi ts. This major project, incorporating feedback from earlier market research and ongoing user consultation, is scheduled for implementation during 2007–08.

Reports for industry

The Corporation’s annual Supply and Demand Forecast was delivered in November 2006, the annual National Winegrape Crush and Price Report was produced as an aggregated report of the Australian Regional Winegrape Crush Survey in January 2007, in-season assessments of the national tonnage were made in February and April 2007, and the annual Vineyard Survey was again an essential foundation for understanding current and future wine grape supply.

The Corporation again collaborated with Monash University to produce and publish the Global Wine Statistical Compendium – a comprehensive record of world wine statistics and trends for industry personnel, investors, analysts, academics and students.

Drought modelling

The extraordinary seasonal conditions experienced in 2006–07 – principally drought – necessitated a change in approach from the traditional method of forecasting future tonnages based on average yields. Drought modelling was introduced in conjunction with the Winemakers’ Federation of Australia to predict yields in different watering scenarios.

Wine Australia Magazine

Five issues of Wine Australia Magazine were published during the year and distributed to 5,000 recipients with further distribution via email and downloads from the website. Content and structure changes were incorporated during the year following reader feedback.

The magazine is a primary vehicle for communicating the Corporation’s activities and need-to-know developments in such areas as overseas market trends, wine law, labelling, export compliance, trade regulation and determinations of geographical indications.

STRATEGY #4Work with the Grape and Wine Research and Development Corporation (GWRDC) to establish AWBC as the acknowledged provider of market intelligence and marketing research and development.

AOP ACTIONS1. Maintain close dialogue with the GWRDC on goal-setting and

developments in market intelligence formation.

2. Enhance the AWBC’s analytical capabilities through new appointments and data acquisition.

ACTIVITIES

National coordination

The Corporation worked closely with the GWRDC, the wine sector’s research and development facilitator, to coordinate product and service delivery to meet the wine sector’s needs and there was particularly close liaison during the Directions project.

The GWRDC provided fi nancial assistance for acquiring global wine data that was central to the Directions to 2025 intelligence gathering process. The Corporation provides marketing expertise to help the GWRDC deliver on the marketing research and development section of its charter.

New appointments

The Corporation employed an additional analyst and a survey coordinator during the year, refl ecting the increased demand for services and support in this area.

STRATEGY #5Increase intelligence on wine sector structure to accurately identify new entrants and changes in operating structures by established producers.

AOP ACTIONS1. Maintain dialogue with industry stakeholders through Corporation

committees and industry seminars and workshops.

2. Continue to review, refi ne and adapt industry data collections and analysis to refl ect and respond to evolving changes in the industry.


ACTIVITIES

Sharing information

Corporation offi cers made numerous presentations at seminars and workshops in all states during the year (in addition to functions organised as part of the Directions project), including a series of industry forums coinciding with the release of the annual Supply and Demand Forecast in November 2006.

In addition, a communication program with state wine sector associations was initiated to further strengthen relationships and help align marketing activities with the Corporation’s overall strategy.

Survey restructured

The Australian Regional Winegrape Crush Survey was restructured during the year to include forward contracting of fruit. The changes were favourably received and further refi nements are being considered, including the identifi cation of generically-sourced fruit, regional-specifi c sourcing, and methods for collecting and reporting price information.

Surveys reviewed

In partnership with the Australian Bureau of Statistics, the relevance, accuracy and effectiveness of existing ABS winemaker surveys is being reviewed, with a particular focus on opportunities to reduce survey load on respondents and administrators. A separate review of industry-sponsored surveys also began during the year.

In recognising the need for improved vineyard data at the regional level, the Corporation undertook some initiatives with regional wine sector organisations to enhance the available information by extending the coverage.

STRATEGY # 6

Promote and communicate to stakeholders the benefi ts of the work done by the Corporation.

AOP ACTIONS1. Distribute media releases on the Corporation’s activities as

opportunities arise.

2. Make presentations at appropriate forums.

ACTIVITIES

Media relations

Regular contributions were made to a range of print media and media releases were issued when opportunities arose. Relationships were developed with all of the major industry journals to facilitate a two-way dialogue.

Public speaking

Corporation offi cers are regularly sought to make presentations to industry groups, service industries and educational institutions on its activities and related wine issues.



STRATEGY #1Maintain a rigorous export approval process aimed at ensuring the quality and integrity of Australian wine.

AOP ACTIONS1. Continue to provide an effi cient wine export approval process.

2. Continue to develop the automated wine export approval system to improve users’ ease of access.

ACTIVITIES

Export approval process

The export of grape products in shipments over 100 litres is prohibited without an export permit. To obtain an export permit, an exporter must hold a license and the wines to be exported must be assessed as sound and merchantable. This three stage process is outlined below.

Grape products include Australian wine, brandy, grape spirit and products derived from grapes that have been declared by the Regulations to be grape products.

Licence to export

A wine exporter must hold a Licence to Export Grape Products issued by the Corporation. Licences can be obtained on-line.

At 30 June 2007 there were 1,730 licensed exporters – a 9.7% increase over the previous year – 36% of which are held by non-wine producers.

Wine inspections

Finished samples of wines proposed for export must be submitted for sensory evaluation by the Corporation’s wine inspectors. Wine judged to be faulty is refused export approval although exporters may resubmit a rejected wine for a second evaluation.

The Corporation maintains a panel of highly qualifi ed wine inspectors who work in pairs on a rostered basis. One is required to have a technical or winemaking background while the other may have a commercial background in wine sales or marketing.

2006/07 was another record year with 18,169 wine samples submitted for evaluation, a 9.2% increase over 2005/06. 375 wines were rejected at the initial evaluation and of those resubmitted, 59 wines were subsequently rejected at the second evaluation.

If a wine is rejected at the second evaluation, the exporter may apply to have the decision referred to a Review Panel comprising fi ve technical experts, none of whom were involved in either previous evaluation. Twelve wines were submitted to the panel during 2006/07.

The number of labels reviewed in 2006/07 increased 12% to set another record of 19,168. In addition, 750 formal label opinion requests were assessed.

A fi fth weekly sensory evaluation session was added in 2006/07 to cope with the increased demand. Sessions are now conducted fi ve times each week, with approximately 70 wines evaluated at each session.

Random checks are undertaken on consignments prior to export to confi rm that the wine being exported corresponds with the samples submitted for evaluation.

Wine shipped in bulk now accounts for 28% of wine exported from Australia. The potential threat to the image of Australian wine, through the uncontrolled handling, storage and bottling practices carried out by overseas bottlers, is managed through the bulk wine procedures. Bulk wine consignees must have approved quality and technical standards and samples of the packaged product must be returned for evaluation by the wine inspectors. 742 samples of Australian wine bottled overseas were returned for inspection in 2006/07.

A list of wine inspectors is included in Appendix 1. The Corporation thanks them for their commitment and service throughout the year.

COMPLIANCE

Output: To protect and enhance the quality and integrity of Australian wine.

Key Performance Indicator: The absence of incidents refl ecting adversely on the reputation of Australian wine.

2006–07 Result: There were no signifi cant incidents during the year that refl ected adversely on the reputation of Australian wine.


Shipment approval

Consignments of wine in excess of 100 litres require an export permit. In addition, wine exports to the European Union require a VI1 Certifi cate in order to enter that market.

In 2006/07, 121,522 export documents were processed, an 8.3% increase over the previous year.

System improvements

89% of shipping documentation is submitted via the online Wine Export Approval (WEA) system ensuring a shorter turnaround time and a reduction in manual handling costs for exporters. The interactive WEA training CD-ROM developed by the Corporation has resulted in a steady increase in the number of exporters accessing the WEA.

A major upgrade of the WEA is currently in progress and has reached the testing phase. Once completed the enhancements being developed will delivered a more effi cient and user-friendly service for exporters.

STRATEGY #2Maintain an effective Label Integrity Program (LIP) aimed at ensuring the quality and integrity of Australian wine. Continue to instil a Culture of Compliance through education, information and assistance.

AOP ACTIONS1. Conduct a comprehensive LIP compliance audit program.

2. Provide information and advice on compliance with wine law via suitable forums and media.

ACTIVITIES

Label Integrity Program

The LIP protects the integrity and reputation of Australian wine by ensuring truth in labelling. Any claim made regarding vintage, variety or geographical origin of a wine must be capable of being substantiated.

The Corporation’s auditors monitor compliance through an audit program that checks that the vintage, variety and origin of a wine can be traced from the grapevine through to the despatch of an export consignment or to the domestic retailer’s shelf. A total of 170 LIP audits were conducted throughout Australia in 2006/07 with 67 South Australian wineries visited as well as 35 wineries in Victoria, 32 in New South Wales, 27 in Western Australia and 8 in Tasmania.

Compliance with the legislative requirements continues to be very high. However, one wine producer’s Licence to Export Grape Products was suspended during the year due to non-compliance with wine standards and the Corporation is involved in an ongoing prosecution of a wine producer over allegations of false label integrity records.

Support from Customs

The Corporation conducts audits in order to detect discrepancies between shipping details supplied to it and those declared to Customs. The Corporation thanks the Australian Customs Service for its continuing cooperation and assistance.

Industry education

A number of presentations were made during the year to industry bodies, wine companies and oenology students outlining elements of wine law and the importance of legislative compliance in preserving Australia’s reputation for producing appropriately labelled quality wines.

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The LIP Record Keeping Templates developed by the Corporation for small to medium sized wineries have continued to assist with developing and maintaining compliance. Templates are available from the AWBC website or by contacting the Corporation.

STRATEGY #3Expand the annual analysis program to include a greater range of potential contaminants and encourage development of validated analytical techniques for substantiating wine provenance.

AOP ACTIONS1. Conduct an analysis program based on established parameters

and additional items identifi ed as potential risks.

2. Monitor developments relating to quality and integrity validation by international regulatory authorities.

ACTIVITIES

Wine standards compliance

Annual surveys of Australian wine to monitor compliance with international standards and environmental sustainability have not found any samples exceeding the maximum residual level determined for any contaminant in Australia’s major markets. The survey program was suspended in 2006–07 as resources were directed to other operations. The program will be restored if a need arises or additional resources become available.

The Corporation has an interest in the development of analytical techniques for confi rming the varietal and regional origin of wine. Discussions were held with authorities in Europe and the United States who are working on the development of such techniques.

STRATEGY #4Support the Winemakers’ Federation of Australia’s (WFA) environmental and health initiatives.

AOP ACTIONS1. Continue to participate in WFA’s Wine Industry National

Environment Committee.

2. Assist WFA with submissions on health-related issues to bodies such as Food Standards Australia and New Zealand (FSANZ) and the Organisation Internationale de la Vigne et du Vin (OIV).

ACTIVITIES

Environmental and health initiatives

WFA plays the leading role in ensuring that the Australian wine sector takes responsibility for the environmental and social consequences of its operations.

The Corporation supported and contributed to the work of the OIV and WFA’s National Environment Committee. During the year the OIV established a health commission as the fourth area of its activity.

Health warnings and labelling for the presence of allergenic material are becoming increasingly common in international markets. The Corporation monitored these developments and communicated such requirements to the industry through its various publications, particularly the Export Market Guide.

STRATEGY #5Ensure the AWBC Act and Regulations remain relevant and provide the Corporation with the necessary powers to fulfi l its duties and that any legislative changes do not compromise the objectives or functions of the Corporation.

AOP ACTIONS1. Regularly review the AWBC Act and Regulations and monitor

the impact of other legislative changes.

2. Ensure the AWBC Act and Regulations are consistent with the renegotiated bilateral treaty with the European Union.

ACTIVITIES

Legislation amended

A number of changes to the Act and Regulations have been identifi ed over the years and the Legislation Review Committee continues to work with the Department of Agriculture, Fisheries and Forestry to secure an opportunity to have them enacted.

The AWBC Act was amended to implement recommendations fl owing from a review of the Corporation against the Uhrig Report. These amendments were in regard to reporting requirements and the composition of the Board.

Amendments to the Act and Regulations must be enacted into implement the terms of the renegotiated bilateral treaty with the European Union when it is fi nalised.


STRATEGY #1Continue proactive involvement in the World Wine Trade Group (WWTG), International Organisation of Vine and Wine (OIV), Federation Internationale des Vins et Spiriteux (FIVS), Codex Alimentarius and other relevant international wine forums.

AOP ACTIONS1. Attend relevant meetings of international wine organisations

and present papers where appropriate.

2. Prepare and disseminate reports on developments in international wine trade issues to the Australian wine sector.

ACTIVITIES

International role

The Australian infl uence in international wine forums has never been greater and key issues have been widely communicated to the Australian wine sector.

The Corporation participated in activities of the WWTG, the OIV (an intergovernmental technical reference body on oenological matters), and the FIVS (the international trade federation) and presented papers where appropriate to ensure Australia’s interests were promoted and protected.

The Corporation contributed fi nancial support to enable an Australian, Mr Peter Hayes, to fulfi l his obligations as President of the OIV and provided funding to enable a suitably qualifi ed Australian expert to attend the OIV technical sessions.

STRATEGY #2Work closely with relevant Australian Government departments on the initiation and negotiation of multi-lateral, bi-lateral, mutual acceptance and free trade agreements with countries that are, or may become, markets for Australian wine.

AOP ACTIONS1. In conjunction with the Australian wine sector, prepare

submissions to assist trade negotiations with those countries identifi ed as important for Australian wine.

ACTIVITIES

Trade agenda

The Corporation, working closely with relevant Australian Government departments and other industry bodies, pursues a comprehensive trade agenda to address market access barriers facing Australian wine exporters. Key goals include improving market access through the lowering of tariffs and other taxes and addressing non-tariff technical barriers relating to wine composition, labelling, certifi cation and winemaking practices.

EU agreement

The bilateral agreement with the European Union (EU) was initialled in June 2007. When in force (likely to be mid-2008), it will provide Australian winemakers with more fl exibility in labelling for that market, allow for the acceptance of all current Australian winemaking practices, and prevent a recurrence of trade confl icts over the composition of Australian wine.

The Corporation continued to monitor proposals to reform the EU’s Common Market Organisation for wine. The proposed reforms will remain trade-distorting but the proposed changes to the wine labelling regime will allow greater fl exibility for imported wines.

Output: To enhance access to international markets for Australian wine.

Key Performance Indicator: An appreciable reduction in trade impediments in overseas markets and the successful negotiation of new bi-lateral and multi-lateral agreements impacting Australian wine sales.

2006–07 Result: There was an appreciable improvement in overseas market access for Australian wine and progress was made towards achieving trade agreements with key markets.

TRADE



FTA negotiations

With the assistance of the Winemakers’ Federation of Australia, the Corporation prepared submissions for proposed free trade agreement negotiations with Japan, Korea and the Gulf Cooperation Council and provided input into ongoing bilateral negotiations with China, ASEAN and Malaysia. The submissions ensure that trade in wine is given full consideration in any negotiations. Australia currently has Free Trade Agreements with the US, New Zealand, Singapore and Thailand.

Discussions with China

The Corporation participated in an agriculture conference in China in September 2006 associated with the Australia-China FTA negotiations. This participation, and the hosting in Australia of key offi cials from China’s quarantine agency, advanced efforts to resolve outstanding labelling and wine compositional issues for imported wine into China.

STRATEGY #3Advocate the removal of tariff and non-tariff barriers to trade, the elimination of production subsidies and the harmonisation of import requirements through the World Trade Organisation (WTO) and other relevant forums.

AOP ACTIONS1. Monitor the international trading environment and identify

impediments to the trade in Australian wine.

2. Assist the Australian Government and its mission to the WTO in Geneva to address matters of interest to the Australian wine sector.

3. Advocate the adoption of the WWTG Mutual Acceptance Agreement by additional countries.

4. Encourage the fi nalisation and adoption of an agreement on wine labelling by WWTG member countries.

ACTIVITIES

WWTG labelling agreement

Signed in Canberra in January 2007, this agreement, once implemented, will facilitate wine labelling arrangements with three of Australia’s largest trading partners and, by virtue of its consistency with European regulations, will allow for the design of a single label that can be applied domestically and sold globally. This initiative has an estimated potential benefi t to Australian wine exporters of at least $25 million per year.

Outreach to APEC members is a priority and the WWTG has developed labelling and regulation principles derived from the WWTG agreements which have been presented to APEC for consideration. The Corporation’s General Manager Compliance and Trade chairs the WWTG’s Regulator’s Forum.

Hong Kong duty reduced

The Corporation supported Australia’s successful move to have the duty applied to imported wine in Hong Kong halved from 80 to 40%. The reduction is expected to save Australian wine exporters up to $10 million per year and an even greater benefi t will be derived if the tax reduction fl ows through to consumers, thus contributing to increased demand.

WTO input

The WTO remains the peak organisation working towards the elimination of production subsidies and the harmonisation of import requirements and the Australian wine sector must ensure that the global trade in wine is included in any negotiations.

The Corporation has been closely monitoring the ongoing WTO Doha Round of trade negotiations and providing input to the Department of Foreign Affairs and Trade as necessary. It also supported Australia’s participation in the WTO disputes taken by the US and the EU against India’s punitive wine tariff regime. As a result, India recently announced its intention to amend its tariff structure to comply with its WTO obligations.

STRATEGY #4Develop and maintain relationships with key global wine people and regulatory agencies to assist in resolving issues and to monitor issues.

AOP ACTIONS1. Visit the UK Food Standards Agency when it assumes controls

of wine policy development and implementation from the Wine Standards Board.

ACTIVITIES

Signifi cant US change

Representatives of the US Tax and Trade Bureau (TTB) visited Adelaide in January 2007 and were briefed on the Corporation’s activities.

The TTB subsequently responded positively to Corporation representations by confi rming the equivalence of the geographical


indication “South Eastern Australia” to the US defi ned category of political subdivisions for the purpose of vintage date labelling. This means that up to 90% by volume of Australian wine destined for the US now only needs to comprise 85% (previously 95%) of the nominated vintage, thus alleviating the need to produce specifi c blends for the US market.

International liaison

The Corporation’s General Manager Compliance and Trade delivered a keynote address on the EC’s Wine Reform at a London seminar hosted by the UK Food Safety Agency – Wine Standards Branch and the Trade Manager met with key regulatory agencies in Taiwan and South Korea in March 2007.

STRATEGY #5Update the Export Market Guide (EMG) and maintain it as a comprehensive guide to conducting business in the principal markets for Australian wine.

AOP ACTIONS1. Redesign, update and relaunch the EMG.

2. Initiate a program to continually review the EMG and to keep it up-to-date and relevant.

ACTIVITIES

Export Market Guide relaunched

The EMG is a useful tool for wine exporters grappling with the complexities of exporting wine.

The online EMG was redesigned, updated and relaunched in October 2006. It has been well-received by exporters and praised as the “international benchmark for market intelligence”. It is regularly updated to incorporate regulatory developments in relevant markets. There are currently individual entries for 30 markets.



STRATEGYMaintain an effective Geographical Indication (GI) regime to defi ne Australia’s wine producing areas and to protect the terms in the Register of Protected Names.

AOP ACTIONS1. Finalise the remaining GI applications.

2. Provide assistance and advice to those seeking new GIs.

3. Communicate requirements arising from the new bilateral treaty with the European Union.

ACTIVITIES

Geographical Indications Committee

The GIC is a statutory committee whose functions are: to determine GIs for wine in relation to regions and localities in Australia; and to determine the cancellation of Australian GIs.

The GIC comprises Ms Anabel Shears Carter (Presiding Member), Mr Dennis Mutton, the winemaker nominated representative, and Mr. Brian Englefi eld, the wine grape grower nominated representative. Mr Bruce McDougall is the alternate winemaker representative and Mr Richard Dolan is the alternate wine grape grower representative.

The GIC made a fi nal determination for Great Western during the year, after a long running objection from a trade mark owner was resolved.

The Administrative Appeals Tribunal (AAT) handed down its decision on the appeal against the GIC’s fi nal determination for King Valley in October 2006, but the decision was subsequently appealed to the Federal Court of Australia (FCA). The FCA handed down its decision in August 2007 dismissing the appeal and upholding the AAT’s decision.

A complaint was lodged with the Commonwealth Ombudsman in May 2006 regarding “the conduct of the process of the application of geographical indications for wine in the Penola / Coonawarra community”. The GIC has responded to the questions raised and at the date of this report, the matter is still under investigation.

There are currently 10 applications at various stages of the process currently before the GIC. The Registrar of Trade Marks is still to make a decision with respect to an objection against the proposed GI of Rothbury.

The Corporation’s Registrar of Protected Names provides administrative assistance to the GIC, assistance and advice to GI applicants and responds to enquiries of a GI nature.

The GIC wishes to record its appreciation to all those who have assisted in the GI process.

Register of Protected Names

The Australian Register of Protected Names gives legal recognition to the wine terms and expressions contained therein. It contains the GIs, traditional expressions, names of grape varieties and other words or expressions of the wine sectors of Australia and foreign countries (currently only the original Member States of the European Union), and prescribes any conditions of use for those terms or expressions.

Inclusion in the Register gives the names or expressions full protection under Australian wine law. The false or misleading use of any of the names, or a failure to observe the conditions of use of any of those names, may lead to prosecution.

Great Western, a GI for Australian wine, was the only new entry in the Register during the year. In order to resolve an objection to the name as a result of a prior trade mark right, the Corporation imposed conditions on the use of Great Western, the fi rst Australian GI to be registered with conditions.

Extracts from the Register, including the legal defi nition (textual description) of Australia’s GIs, are available on the Corporation’s website. The Register may also be inspected at the Corporation’s offi ce during business hours.

GEOGRAPHICAL INDICATIONS


The operating result for 2006–07 was a surplus of $239,000, an increase of $235,000 on the budgeted surplus of $4,000 reported in the Portfolio Budget Statement. The increase was as a result of a decision by the Corporation to reduce administrative costs and increase cash reserves in response to an anticipated reduction in revenue resulting from expected lower grape crushes in 2007 and 2008.

Cash holdings at 30 June 2007 were $2.551 million, or $45,000 more than reported in the Portfolio Budget Statement.

Levy revenue

Industry levies based on the previous year’s wine grape crush and the value of current year wine exports are a major source of funding for the Corporation.

The 2006 wine grape crush of 1.901 million tonnes was marginally below the prior year’s vintage resulting in a 1.5% reduction in Wine Grape Levy revenue to $3.161 million.

The value of wine exports increased by $191 million to $2.992 billion in 2006–07 due to an 8% increase in the volume of wine exported, however the average value of exports reduced 5 cents per litre to $3.75 per litre. Wine Export Charge revenue increased 3.3% on the previous year to $3.002 million.

Industry contributions

Contributions to the Corporation’s overseas marketing program memberships increased 4.5% on the previous year to $2.431 million but contributions to user-pay promotional events in overseas markets fell 60% to $748,000 due to a decision to defer some overseas promotions and cancel the Wine Marketing Conference.

Revenue from regulatory fees was $565,000 more than last year due largely to the growth in the volume of exports from an expanded number of exporters.

Australian Wine Overseas program

The AWO program is aimed at promoting the sale of Australian wine overseas by making it available in Australian and other diplomatic missions throughout the world. Turnover of $749,000 was down 41% on the previous year due to a reduction in sales in the second half of the year. However the program returned an operating surplus of $24,000.

Directions

The Directions to 2025 project identifi ed the need for additional market intelligence on key global wine markets. The Corporation

FINANCIAL RESULTSwas able to deliver on this requirement by re-aligning its priorities and with funding support from the Grape and Wine Research and Development Corporation and the Department of Agriculture, Fisheries and Forestry totalling $173,000. The total cost of the project including the additional market intelligence was $791,000, of which $694,000 was paid in 2006–07.

Information Services

Information sales revenue increased by 24% to $170,000, due largely to the release of the updated Export Market Guide in the fi rst half of the year. Demand for information provided by the Corporation through WINEFACTS remains strong.

Organisational restructure

Despite a small budgeted increase in staff numbers, action was taken to restructure the organisation in line with an expected downturn in levy revenue as a result of the drought. Seven full-time positions were identifi ed as redundant. Six of these redundancies occurred during the later part of the year at a cost of $156,000 and the remaining position will be vacated during 2007–08.

Information technology and e-business

The in-house redevelopment of the online wine export approval application has continued on schedule and within budget throughout the year and is expected to be implemented by February 2008.

Financial statements

Full details of the Corporation’s fi nances are included in the Financial Statements section of this report.

Developments since the end of the fi nancial year

No matter or circumstance has arisen since the end of the fi nancial year that has signifi cantly affected, or may signifi cantly affect:

• the Corporation’s operations in future years; or

• the results of those operations in future years; or

• the Corporation’s state of affairs in future fi nancial years.

Signifi cant changes in principal activities or the state of affairs

There have been no signifi cant changes in the Corporation’s principal activities or, except for those matters outlined above, in the state of its affairs during the fi nancial year.

Signifi cant events

There were no signifi cant events within the meaning of section 15 of the CAC Act that required particulars to be provided to the Minister.



UNITED KINGDOM

The UK market

While the UK market is still growing, albeit at a slower rate, consumers continue to favour Australian wine. Australia holds 24.4% of the off-premise market by value and 22.5% by volume, with multiple grocers continuing to dominate. Price promotion has been the primary marketing tool in the category, resulting in heavy discounting, with popular branded wine used as a driver to encourage footfall in large, multiple retail outlets.

Anecdotal evidence suggests that new wine consumers are no longer driving growth. Rather, growth is coming from existing consumers purchasing more bottles of wine more frequently. This highlights the need for brand owners to focus on product, packaging and marketing innovation to enhance future growth in what appears to be a plateauing market opportunity.

Apart from multiple retail outlets, other off-premise opportunities include high street specialist retailers – where Australia underperforms relative to its total market share – as well as an emerging opportunity with independent retail shops, which are currently enjoying growth (albeit off a small base). In the on-premise, the challenge remains across the total channel spectrum to improve Australia’s market share. Ultimately, a target goal of matching Australia’s share of restaurant business with the share of the popular retail franchise is an ambitious, but not un-realistic goal.

There are two social/ethical concerns that are gaining very strong momentum. Environmental issues are taking the forefront in UK politics, economics and consumer awareness, and there is growing pressure on the industry to self-regulate with policies and guidelines pertaining to responsible service of alcohol. Neither of these concerns is unique to the UK, however both will have a signifi cant impact on production and marketing of Australian wine in the coming years.

Corporation activities

The Corporation responded with new UK program initiatives targeted at opportunities within specifi c channels. The 2006 Australia Day Tasting program promoted the new marketing strategy and accommodated a range of tasting and seminar opportunities for specifi c retail and on-premise interests, including an inaugural consumer event which attracted over 500 paying customers and a Directions to 2025 briefi ng for all UK importers and agents.

The campaign year included tailored features for retail groups (including assisting supermarket groups with itineraries for buyers’ visits), independent retail specialists (Independents’ Day), mail-order consumer groups (Telegraph Wine Club Uncover Australia), as well as educational master-classes for on-premise sommeliers and wine-buyers (Regional Heroes and Landmark Australia). In addition, the UK offi ce coordinated an improved communication strategy with an updated bi-monthly newsletter, specifi c trade media briefi ngs on industry issues, a refreshed Wine Australia website and additional reports on market intelligence and consumer trends.

IRELAND

The market

After 10 years of sustained double-digit growth, the Irish wine market experienced more modest gains in 2006, growing just 4% by volume. However, this growth is predicted to continue over the next fi ve years, creating a healthy market for Australian producers.

Various factors will continue to infl uence this growth. Ireland’s low average consumption of wine, the increased effects of a smoking ban, increased excise on spirits and the enforcement of drink driving laws appear to have contributed to the adoption of wine as the alcoholic beverage of choice. However, the government is under increased pressure to act more purposefully to curb the abuse of alcohol in Ireland.

The off-trade continues to dominate the wine market, accounting for about 70% of sales. Increased competition between the larger retailers has contributed to this growth, while at the same time putting increased pressure on the independent and specialist sector.

Australia remains the largest supplier with 26% of the market by volume. Volume and value growth have closely matched each other, evidenced by the fact that Australia is the largest supplying country at all price points above 7.50 euro. Chile, South Africa and the USA are Australia’s largest competitors at the < 10 euro price point, while Spain showed strong growth in the 10 – 14.99 euro category last year.


The Corporation continued to highlight the value, variety, regionality and quality of the Australian wine offering. Retail training seminars made a signifi cant contribution to educating those at the coal face of the industry. Events such as the Take Two Tastings and the major Wine Australia Tasting in January 2007 was another step in presenting the development of Australia as the most relevant and compelling category in Ireland.

Future activities will include the Australian Wine Club Challenge targeting the numerous wine clubs throughout the country, a series

REGIONAL REPORTS


of independent off-licence training seminars run in conjunction with the National Off Licence Association, further Take Two Tastings and a Regional Heroes Tastings series.

UNITED STATES

The market

There was good news for Australian wine in the US, with sales topping 300 million cases in 2006 and the average value per litre shipped increasing in 2006–07 for the fi rst time in two years, with a greater share in the over A$5 per litre (FOB) category. The US accounted for 27.6% of Australia’s wine shipments by volume and just over 32% by value in 2006–07.

The US imported 23.8 million cases of Australian wine in 2006. Only Italy was higher with 26.2 million, with both countries increasing volume by 7%. France increased an impressive 22%, but dropped back in the fi rst few months of 2007.


Education is a proven key to developing a better understanding of Australian wine among the trade – from mass market retail chains to fi ne dining – and encouraging their interest in higher priced Australian wines. This year marked the fourth AusWAT class, with record participation and a broader range of winners. Next year the Australian Wine Adventure will merge with Australia: world class to bring further opportunities to communicate the category’s unique features.

The Corporation delivered the message of Australian quality, diversity and higher-priced wines directly to affl uent, wine-drinking consumers by entering into partnership with the Cooking by the Book school in New York. Classes and seminars held since April 2007 have put Australia’s Regional Heroes in front of two dozen Fortune 500 companies and more than 400 new consumers.

The media also has a strong infl uence in encouraging consumers to trade up. A series of specially-themed press lunches in key markets has just begun, with a view to informing both trade and consumer media on Australia’s unique features and industry issues. This initiative has already resulted in articles in the New York Times and the San Francisco Chronicle.

A Wine Marketing Workshop was held with Australian wine importers to encourage them to become more involved in their Wine Australia. Ideas generated included Power Tastings for the trade, a Consumer Charter and website developments such as the addition of podcasts and winemaker profi les on the US site.

Directions to 2025 and Australia: world class have begun to deliver benefi ts and there is a lot to look forward to in 2007–08.

More Power Tastings and Sommelier Showcases will be organised and the Corporation will work with the Society of Wine Educators on an exciting new partnership.

CANADA

The market

Australian wine sales grew almost 8% by volume over the twelve months to March 2007, compared to overall growth of the wine category in Canada of 7.5%, with Australian growth generally occurring at higher price points. Provincial governments have alcohol monopolies in all provinces except Alberta and thus largely control opportunities, but 2006–07 saw a maturing of the market in a number of larger provinces.

Australia is the third largest supplier with about 13.8% of the market, behind France (17.1%) and Italy (14.9%), but there is strong competition from other New World countries, in particular the US, whose marketing efforts are well resourced, Argentina, which is aggressively targeting the value price category, and Chile, which has substantially increased its marketing presence in the past year. The priority for Australian brands remains to build greater diversity and market depth in the on-premise channel.

Growth in French-speaking Quebec has slowed and there is an identifi ed opportunity to invest resources, both fi nancial and human, to ensure Australia’s share of the market continues to develop. Argentina and Spain in particular have gained market share in the last fi scal period with the aid of in-market representation.


Market Program participation continues to be healthy with close to 60 wine companies involved, representing well over 100 brands. Activities in 2006–07 included the successful Australian theme country role at the 2007 Vancouver Playhouse International Wine Festival. This elevated Australia’s visibility in the maturing British Columbia market in particular, with comprehensive media coverage surrounding all Australian events. In addition, the Australia: world class launch in September 2006 sparked interest and uptake from the education community.

With a new team in place in Canada and an innovative approach, educating Canadians, both consumers and trade, continues to be a focus via programs that develop stronger awareness of Australia’s Landmark and regionally distinct wines. Programs designed to reach new wine drinkers with Brand Champions and Generation Next wines will be rolled out in 2007–08. Relationships with key educators continue to be widened, nurturing and further cementing the delivery of the Aussie diversity message.



CONTINENTAL EUROPE

The market

Continental Europe – a complex combination of 40 countries and more than 700 million consumers – is Australia’s third biggest market after the UK and the US. Australian exports to Continental Europe rose 15% by volume in 2006–07, to 134 million litres, and 15% by value to $343 million.

In the past has concentrated on Sweden, Denmark, Netherlands, Belgium, Germany and Switzerland, but Norway, Finland, Russia, Poland, Austria, Italy and France have been added to the list for targeted activities. The market share for Australian wine varies from just under 1% in France and Italy to nearly 20% in Sweden, which in March 2007 became the fi rst non-English speaking country in which Australia has market leadership.

Most European markets are still under price pressure, though the reasons for the relatively low prices vary. They include retailing structures, local bottling (Germany and Netherlands) and high demand for bag-in-box (Scandinavia). The highest average prices are in Switzerland and Russia, with FOB values of A$4.48 and 4.03 respectively (on a level with US).


Because of market complexities in terms of culture, heritage and geographical diversity, the Wine Australia Europe offi ce continues with its strategy of creating Ambassadors in three segments of the market, building long-term relationships with retail organisations, achieving a greater impact with key media and generating commitment from sommeliers and restaurants in major urban areas.

Exciting and compelling initiatives have been created for the on-trade segment such as the Iconic Australia event and Themed Tastings across major urban areas, targeted at key restaurants and sommeliers. Key sommeliers are targeted to visit Australia with the aim of creating ambassadors for Australian wine. This will slowly increase Australia’s penetration on wine lists, thus building the awareness that Australian wine does match with the European cuisine.

The enormous diversity of media channels in each European market, together with Australia’s limited resources, limits the media program. However, through persistence and focus in this segment, more traction is being achieved, building the awareness and profi le of Australian wine.

JAPAN

The market

Australian exports to Japan have reached new heights in the past three years, with sales just exceeding 1 million cases in 2006

and volume growth of 23% in the fi rst half of 2007. As a result, Australia is now seen as a “player” in the wine game, and this is evident in off-premise channels, where Brand Champions continue to gather pace, and in the fi ne-dining sector, with Australian wine never so prevalent on wine lists.

However, the structural challenges of the Japan wine market remain: poor retail shelf navigation, distribution road blocks and low penetration into the daily food culture. Anecdotal evidence suggests that increased clamp downs on drink driving continue to have a negative impact on alcohol and wine consumption on-premise. Within this context, the overall wine market grew only marginally during 2006, continuing a horizontal trend that started post the late 90’s wine boom. Clearly, a paradigm shift is needed for wine to become anything more than a drink for special occasions.


Supermarkets hold the key to future growth of the wine category and Wine Australia activity launched in April 2007 to engage supermarkets has had a positive start. This gathering together of wineries, importers and distribution gatekeepers uses a simple merchandising concept expressed through bold visual materials that align with the Brand Champions positioning. By the end of June 2007, more than 100 stores had taken up the concept and participated in the promotion.

The hitherto general trade tastings were re-formatted during the year to refl ect channel and listing timings, and were subsequently split into two dedicated periods of activity (off- and on-trade) at different times of the year.

The year also saw a renewed effort to re-engage key educators. Eight lecturers from the top wine schools of Japan were hosted on a study mission to Australia during March 2007. Concurrently, the Japanese version of the Australia: world class platform was localised and a support kit was developed for the schools. This represents a quantum leap in terms of base education materials.

For the second year running, Landmark Australia wines were profi led with support from the relevant wineries. In April 2007, the largest line-up of top Australian cabernet ever to be seen outside of the country was presented to trade and media in Tokyo by Jeremy Oliver.

Media relations require a consistent and long-term approach and, it was pleasing that Australia was the feature country and lead story for the April 2007 edition of Wine Kingdom, one of the leading wine magazines in Japan. Spanning over 30 pages of editorial, this edition was anecdotally the second best selling in the history of the magazine.


THE ORGANISATIONSTATEMENT ON GOVERNANCE

A Corporate Governance Statement has been adopted that sets out the corporate governance framework that ensures the Corporation operates effectively and effi ciently in fulfi lling its functions.

The corporate governance framework includes a range of policies and procedures covering the conduct of members and staff and various aspects of the Corporation’s operations.

Apart from a Code of Conduct for Members, formal policies have been adopted providing for an annual review of the performance of members and establishing their right to access independent professional advice.

Board responsibility

The Members of the Corporation (the Board) are responsible to the Minister for Agriculture, Fisheries and Forestry (the Minister), and through the Minister to Parliament, for the operations of the Corporation. The Board is responsible for the Corporation’s overall strategic direction and directs its functions and the achievement of its objectives by a process of policy decisions.

Board composition

The Corporation comprises eight non-executive members; a Chairperson, and seven “other members”. The Minister appoints the members; with the “other members” being appointed from persons nominated by a wine-industry-based Selection Committee on the basis of expertise in winemaking, grape growing, marketing, fi nance, business management and administration or government policy processes and public administration.

The position of Government Member was abolished on 22 June 2007 when the number of “other members” was increased from six to seven. Mr Geoff Gorrie’s appointment as Government Member terminated when the position was abolished and at the date of this report, the newly created “other member” position was vacant.

The members’ terms of appointment expire on 30 April 2008 except for the Chairman, whose term expires on 30 June 2009.

Members’ remuneration is determined by the Remuneration Tribunal pursuant to the Remuneration Tribunal Act 1973.

Management

Responsibility for the day-to-day conduct of the business is delegated to the Chief Executive, who ensures that the Board’s decisions are translated into actions by the management team. The management team reports to the Chief Executive, who in turn is accountable to the Board.

The management team is selected by the Chief Executive, in consultation with the Chair of the Corporation if appropriate, on the basis of experience and expertise.

The Chief Executive’s remuneration is determined by the Remuneration Committee in consultation with the Board, while the Chief Executive determines the management team’s remuneration in consultation with the Remuneration Committee.

Meetings of members

The Board met formally on eight occasions during the year. Members’ attendance at meetings is shown in the schedule that follows.

External auditor

The Corporation’s Financial Statements are independently audited by the Australian National Audit Offi ce in accordance with Australian National Audit Offi ce Auditing Standards.

Audit and Finance Committee

The Audit and Finance Committee, comprising three Members of the Corporation, assists Members in determining whether:

• their Aactions comply with the Act and other relevant acts

• the accounting records are appropriately maintained

• there are adequate internal controls to safeguard the assets of the Corporation

• the strategic planning documents and budgets have been satisfactorily compiled

• the Financial Statements and management reports give a true and fair view

• there are reasonable grounds to believe that the Corporation can pay its debts when they fall due.

The Committee meets with management and the external auditor, creating a direct line of communication between the Members and the auditor. A clear and objective assessment can then be made of the accuracy and quality of accounting policies, records, reports and internal control procedures.


THE ORGANISATION (CONTINUED)

Remuneration Committee

The Remuneration Committee, comprising two Members of the Corporation, provides guidance on remuneration matters, including the remuneration paid to the Chief Executive and senior staff.

Other committees

Committees comprising Members and industry and Government representatives play a key role in the decision making process. Apart from those mentioned above, the Corporation’s committees comprise:

• Market Development Advisory Committee – oversees the development and implementation of export market development strategies and promotional programs on behalf of the Australian wine sector.

• Compliance Advisory Committee – monitors compliance with winemaking laws and standards, oversees the Label Integrity Program and advises on wine export approval policies and procedures.

• Geographical Indications Committee (GIC) – a statutory committee independent of the Corporation, the GIC defi nes the names and boundaries of Australia’s wine growing regions.

• Knowledge Development Advisory Committee – provides guidance on the information and analysis services offered by the Corporation.

• Legislation Review Committee – reviews the Act and Regulations and initiates any required changes to ensure that the law provides an effective framework for regulating the Australian wine sector.

• International Trade Advisory Committee – provides advice on international trade policies and issues, particularly in regard to access to overseas markets. The functions of the International Trade Advisory Committee were absorbed into the Market Development Advisory Committee in August 2007.

Membership of these committees, and committee members’ attendance at meetings held during the year, is shown in the following schedule. The Corporation thanks the members of these committees for their contribution throughout the year.

Risk factors

The Corporation’s operations are fi nancially dependent on the prosperity of the Australian wine sector. The principal source of revenue is from wine producers and exporters in the form of levies, export charges, voluntary contributions to overseas promotional programs and fees paid for export approval inspections and documents.

A reduction in revenue as a result of a downturn in wine production or wine exports is a risk to the Corporation. To manage this risk, the Corporation maintains fi nancial reserves and monitors the situation to tailor the level of activities undertaken to the amount of revenue anticipated.

Client Service Charter

The Corporation provides services to the wine sector and wine sector information to the public. The Corporation is committed to providing these services with a client focus whilst conscious of the need to maintain the integrity and reputation of Australian wine by enforcing regulations.

The Corporation aims to provide an effi cient, prompt, helpful service to clients while respecting confi dentiality and upholding the law in an impartial and consistent manner. The Client Service Charter is available on the Corporation’s website.

MEMBERS OF THE CORPORATION

The Members of the Corporation at the date of this report are:

THE HON JOHN MOORE AO (Chairman)Appointed on 1 July 2006

The Hon John Moore has had a distinguished career in business and politics including terms as Minister for Defence and Minister for Industry, Science and Tourism in the Australian Government. Prior to entering Parliament, he built a successful stockbroking and corporate advisory business and was a member of the Brisbane Stock Exchange for 12 years. He is non-executive Deputy Chairman of Mineral Securities Limited, a successful resource investment business, and a director of CopperCo Limited. He has held directorship in a number of Australian companies, including CitiNational Ltd, Merrill Lynch (Aust) Pty Ltd and Grindlays (Aust) Pty Ltd.

Mr Moore chairs the Market Development Advisory Committee and the Remuneration Committee.

MR LEON DEANSRe-appointed on 1 May 2005

Leon Deans has a Bachelor of Applied Science in Oenology and a Graduate Diploma in Business Administration. The Innovations Manager for Pernod Ricard Pacifi c, his 31 years in the industry has provided him with extensive technical and commercial expertise in many aspects of winery management and operations from grape


growing and winemaking to the development of new vineyards and wineries. He is a foundation member of the Australian Society of Viticulture and Oenology.

Mr Deans was fi rst appointed as a non-executive Member of the Corporation on 2 May 2002. He chairs the Compliance Advisory Committee and is a member of the Audit and Finance Committee.

MR MICHAEL DE PALMARe-appointed on 1 May 2005

Michael De Palma has been a grape grower for over 20 years and has extensively redeveloped his family vineyards at Red Cliffs, Victoria. He has kept at the forefront of innovation within his fi eld and has completed professional development courses in business management, quality accreditation, irrigation management, pest management and rural leadership. Heavily involved in wine grape organisations, he was interim Chairman and is an Executive Committee member of Wine Grape Growers Australia, the national wine grape grower organisation, and was a member of the Winegrape Growers’ Council of Australia prior to its dissolution. He chairs the Murray Valley Wine Growers’ Inc and is a former President of the Murray-Darling Winegrape Growers’ Association. He is a member of the Wine Industry Relations Committee and the Legal Metrology Working Group and a former member of the Grape and Wine Research and Development Corporation’s Priorities Reference Group (Viticulture).

Mr De Palma was fi rst appointed as a non-executive Member of the Corporation on 2 May 2002 and he chairs the Knowledge Development Advisory Committee.

MS CAROLINE DUNNAppointed 1 May 2005

Caroline Dunn completed her Bachelor of Oenology with First Class Honours in 1996, making her one of the University of Adelaide’s most successful students. She is Regional Red Winemaker – Barossa with The Foster’s Group, overseeing all red wine production at the Penfolds and Wolf Blass Wineries in the Barossa Valley. Between them, the wineries crush approximately 55,000 tonnes of red grapes annually and produce 20 multi-award winning Australian wine brands.

With more than eight years’ judging experience at national and regional wine shows, Ms Dunn was awarded dux of the inaugural Len Evans Tutorial in 2001 and was the inaugural candidate of the Barossa-Rhone Exchange program in 2000. Prior to becoming a winemaker, she worked as a Sales Development Manager for Carlton Special Beverages in Sydney and was previously Manager of Sydney’s highly acclaimed Bather’s Pavilion Restaurant.

Ms Dunn is a non-executive Member of the Corporation and a member of the Compliance Advisory Committee.

MR ANGUS KENNEDY (Deputy Chairman)Re-appointed on 1 May 2005.

Angus Kennedy holds degrees in Engineering (Chem) and Commerce and has had a long involvement in the wine sector. Following the takeover of BRL Hardy Limited by Constellation Brands in March 2003, he served as Senior Vice President Operations and Technical for Constellation Wines, the global wine division of Constellation Brands, until his retirement in 2006. Prior to the takeover, he was Operations and Technical Director for BRL Hardy Limited and travelled throughout the wine industries of the USA, France, Spain, New Zealand and Sicily, gaining extensive experience in the world wine industry, particularly in the areas of grape supply, wine production and packaging. He was a director of Barossa Valley Estate (a 50% BRL Hardy joint venture in the Barossa Valley), Brookland Valley (a 50% BRL Hardy joint venture in Western Australia), Pacifi c Wine Partners (a 50% BRL Hardy joint venture in the USA) and Domaine de la Baume, BRL Hardy’s wine business in France.

Mr Kennedy was fi rst appointed as a non-executive Member of the Corporation on 24 May 2001 and was appointed Deputy Chairman in August 2005. He chairs the Audit and Finance Committee and is a member of the Remuneration Committee.

MR ANDREW MOOREAppointed 1 May 2005

With over 17 years’ experience in the wine and liquor industry, in 2003 Andrew Moore started his own business, Build Your Own Brands (B.Y.O.B.), specialising in international and domestic sales, marketing and distribution strategies and solutions, along with capital raising, winery acquisitions and business plans. He was previously Managing Director of Xanadu Wines Ltd, where he was responsible for listing the company on the Australian Stock Exchange, raising capital, acquiring Norman’s Wines and Next Generation Wines and setting up sales and distribution networks to achieve global sales growth from 8,000 cases to over 400,000 cases per annum.

Starting as a key account representative with Lionel Samson & Son in 1989, he joined Tucker Seabrook Australia as State Manager and Director for Western Australia and Victoria in 1993 before being appointed Regional Director for Grolsch Asia Pacifi c in 1996. Based in Singapore, he opened two offi ces in China and with an offi ce in Japan, grew sales from 100,000 cases to over 500,000 cases per annum from 1996–1999. He is a Past President of the Western Australian Wine Industry Association.

Mr Moore is a non-executive Member of the Corporation and a member of the Market Development Advisory Committee.



MR MARK PURBRICKAppointed 1 May 2005

Mark Purbrick trained as a winemaker at Roseworthy College but for the majority of his working life has been involved in hospitality, retail, direct marketing and executive management activities. He is the Managing Director of Management Solutions Australia and Regional Director of Profi les International. He was previously Chief Executive Offi cer and a director of The Wine Society and has served as Trading Manager for Cellarmaster Wines (Foster’s Group Limited), General Manager for Basedow Wines Pty Ltd and General Manager for Arrowfi eld Wines Pty Ltd. He has had extensive involvement as an Australian and international wine show judge and has served on numerous wine industry committees and boards, including the Australian Regional Winemakers’ Forum.

Mr Purbrick is a non-executive Member of the Corporation. He Chairs the Legislation Review Committee and is a member of the Audit and Finance Committee.

FORMER MEMBERSOther Members of the Corporation during the period covered by this report were:

MR GEOFFREY GORRIE30 April 2002 to 22 June 2007

Geoff Gorrie holds a Bachelor of Science, a Diploma of Education, a Bachelor of Arts and a Bachelor of Economics. He was awarded the Public Service Medal on Australia Day 2002. He retired as Deputy Secretary of the Australian Government Department of Agriculture, Fisheries and Forestry in December 2002 where his main areas of responsibility included food, wine, market access, biosecurity, product integrity and animal and plant health issues. He has a long history in agricultural, food policy and resource management issues at Australian Government level and extensive experience in management and administration. He chairs the Advisory Council of the National Land and Water Resources Audit, Safe Food Production Queensland and Australian Forestry Standard Ltd and is a member of the Natural Heritage Trust Advisory Committee.

Mr Gorrie was the non-executive Government Member of the Corporation and chaired the International Trade Advisory Committee until the position of Government Member was abolished on 22 June 2007.

ANNUAL GENERAL MEETING OF THE INDUSTRY

The 20th Annual General Meeting of the Industry (AGM) was held in Adelaide on 7 December 2006.

The Chairman and the Chief Executive presented reports on activities and achievements during the year and on the Corporation’s plans for the future. No motions were considered at the AGM.

GEORGE MACKEY MEMORIAL TROPHY

The George Mackey Memorial Trophy for 2005–06 was presented at the AGM to Penfolds 2003 RWT Shiraz. Established in memory of a former chairman of the Corporation, this annual award is presented to the producer of the best export wine of the year.

AWBC Chairman Hon John Moore presents the George Mackey Memorial Trophy to Penfolds winemaker Steve Leinert


ATTE

ND

ED

HEL

D*

ATTE

ND

ED

HEL

D*

Board Market Development Advisory Committee

John Moore (Chair) 8 8 John Moore # (Chair) 3 3

Leon Deans 8 8 Stephen Couche 2 3

Michael De Palma 7 8 Gordon Gebbie 2 3

Caroline Dunn 7 8 Robert Hill-Smith 1 3

Geoff Gorrie (ceased 22/6/07) 7 8 Ian Hollick 2 3

Angus Kennedy 7 8 Jenny Lee (ceased 2/8/06) 1 1

Andrew Moore 8 8 Simon Marton (appt 15/11/06) 0 2

Mark Purbrick 8 8 Andrew Moore # 2 3

John Soutter 3 3

Audit and Finance Committee Stephen Strachan 3 3

Angus Kennedy # (Chair) 4 4 Sam Tolley + 3 3

Leon Deans # 4 4 David Woods (Deputy Chair) 2 3

Mark Purbrick # 4 4

Knowledge Development Advisory Committee

Remuneration Committee Michael De Palma # (Chair) 3 3

John Moore # (Chair) 2 2 John S Harvey 2 3

Angus Kennedy # 2 2 W John Harvey 2 3

Peter Hayes 1 3

Legislation Review Committee James Lovell 3 3

Mark Purbrick # (Chair) 2 2 Mark McKenzie 3 3

Tony Battaglene 1 2 Ian Robinson (appt 3/4/07) 1 1

Owen Malone 2 2 Jan O’Connor 2 3

Michael Ryan 1 2 Brian Walsh 2 3

Will Taylor 1 2 Doug Young 3 3

Kate Thompson 1 2

John Whelan 1 2

BOARD AND COMMITTEE MEMBERSHIP AND ATTENDANCE AT MEETINGS



ATTE

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ED

HEL

D*

ATTE

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ED

HEL

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Compliance Advisory Committee International Trade Advisory Committee

Leon Deans # (Chair) 1 1 Geoff Gorrie # (Chair – ceased 22/6/07) 2 2

Caroline Dunn # 1 1 Tony Battaglene 1 2

Neil McGuigan 0 1 Chris Hancock 2 2

Jim Moularadellis 1 1 Philip Laffer 1 2

Sakkie Pretouris 1 1 Kevin McLintock 2 2

Mark Tummel 1 1 Stephen Miller (Deputy Chair) 2 2

John Whelan 0 1 Peter Perrin 1 2

Michael Ryan 2 2

Geographical Indications Committee Tony Royal 1 2

Anabel Shears Carter (Presiding Member) 6 6 Stephen Strachan 0 2

Brian Engelfi eld 6 6 Sam Tolley + 2 2

Dennis Mutton 6 6 Peter Wall 2 2

Elizabeth Ward 2 2* Indicates the meetings held during the year that the member

could have attended

# Indicates a Member of the Corporation

+ Indicates a Corporation employee


This chart is a diagrammatic presentation of “lines of authority” and is not an indication of “seniority” within the Corporation.

ORGANISATIONAL STRUCTURE

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ADMINISTRATION

Staffi ng

The Corporation employed 55 people at 30 June 2007. A directory of employees at the date of this report is included as Appendix 1.

MALES FEMALES

LOCATION FULL-TIME PART-TIME FULL-TIME PART-TIME TOTAL

Australia 17 1 23 2 43

Continental Europe 2 3 5

UK & Ireland 1 4 5

Japan 1 1 2

Total 21 1 31 2 55

Freedom of information

No requests for information under the Freedom of Information Act, 1982 (the “FOI Act”) were received during the 2006–07 year.

The following information is provided as required by the FOI Act:

• The Corporation’s functions, organisational structure and decision-making powers are detailed elsewhere in this report.

• Formal consultancy arrangements are in place with the national winemakers’ and grape growers’ organisations to enable them to contribute to the formulation of policy. Wine sector representatives sit on all advisory committees.

• Interested parties may contact the Chief Executive or any Board Member to comment or make suggestions on policies or procedures.

• Freedom of information inquiries, including requests for access to documents, may be directed to the Corporation Secretary.

• Corporate Plans, Annual Operational Plans, Annual Reports and the Register of Protected Names are available for inspection at the Corporation’s offi ce and can be viewed on the Corporation’s website.

Occupational health and safety

The Corporation is committed to providing a safe and pleasant work environment for both staff and visitors as required by the Occupational Health and Safety (Commonwealth Employment) Act, 1991.

Because of its size, the Corporation is not required to establish a health and safety committee and staff elected not to establish designated work groups or to select health and safety

representatives. The Corporation agreed to consult with all staff on health and safety matters and to include them in the decision making process. An Occupational Health and Safety Policy has been developed in consultation with staff.

All necessary measures were taken during the year to ensure the health, safety and welfare of staff and visitors. There was one reportable injury during the year and no investigations were conducted.

Judicial decisions and reviews by outside bodies

An application was lodged with the Administrative Appeals Tribunal (AAT) in January 2005 requesting a review of the Corporation’s decision to refuse the applicant’s application for a Licence to Export Grape Products. The application was withdrawn in June 2007.

Apart from this matter, the Corporation was not the subject of any;

• judicial or administrative tribunal decisions that have had, or may have, a signifi cant impact on the operations of the Corporation; or

• reports by the Auditor-General (other than the report on the fi nancial statements), a Parliamentary committee or the Australian Government Ombudsman.

Ministerial directions

The Act provides that the Minister may give direction to the Corporation with respect to the performance of its functions and the exercise of its powers. No such direction was given in the period under review.


Under the CAC Act, the Minister, and the minister who administers the CAC Act, may issue directions to the Board, and the Minister may notify the Board of any general Australian Government policies that apply to the Corporation. At the date of this report, the following notifi cations have been received:

• In July 1998, the Minister issued a directive in accordance with Section 16(1)(b) of the CAC Act requiring the Corporation to comply with the reporting requirements of the Guidelines on Funding of Consultation Costs by Primary Industry and Energy Portfolio Statutory Authorities.

• In December 2006, the Minister for Finance and Administration issued a directive in accordance with Section 16(1)(c) of the CAC Act requiring the Corporation to provide annual Compliance Reports on legislative compliance and fi nancial sustainability.

• The Minister has notifi ed the Corporation under Section 28 of the CAC Act that the following policies apply to the Corporation:

– On 21 August 2002, Commonwealth Fraud Control Guidelines 2002.

– On 8 November 2005, Australian Government Property Ownership Framework.

– On 24 January 2007, Protective Security Manual 2005 (PSM).

In June 2007, the Corporation advised the Minister that it was not complying, and would not be in a position to comply with the PSM until it had the resources necessary to fully assess its requirements and to then implement them. The Corporation asked the Minister to consider the possible suspension of the section 28 notice or extending the date from which the PSM was to apply. The Minister noted the Corporation’s concerns and encouraged the Corporation to look at appropriate approaches to allow it to set up the necessary processes.

Consultancy payments to industry organisations

The Corporation has formal relationships with the following industry organisations:

• Winemakers’ Federation of Australia Inc (WFA) – the peak organisation representing Australian winemakers. Consultation payments totalling $150,000 were paid to WFA during the fi nancial year in regard to a range of matters including technical issues, the National Wine Industry Outlook Conference, a health and social responsibility strategy, vine health and biosecurity issues, grape grower policy matters and environmental activities.

• Wine Grape Growers Australia (WGGA) – the peak organisation representing Australian wine grape growers. A payment of $30,000 was paid to WGGA during the fi nancial year for the provision of wine grape sector information and feedback, and for participation in the National Winegrape Utilisation Project and the Directions industry strategy.

Ecologically sustainable development and environmental performance

In accordance with the requirements of the Environment Protection and Biodiversity Conservation Act 1999, the Corporation reports that:

• it supports the principles of ecologically sustainable development and seeks to ensure that its activities accord with those objectives by taking economic, environmental, social and equitable considerations into account in the decision making process.

• its outcome – to enhance the operating environment for the benefi t of the Australian wine industry – contributes to ecologically sustainable development by facilitating growth in the industry in a sustainable and responsible manner.

• its activities have minimal impact on the environment and it cares for the environment by minimising the consumption of power and by recycling waste products where practicable.

Disability strategy

The Corporation’s policies, programs and services are accessible to people with disabilities and meet its obligations under the Disability Discrimination Act 1992. The Corporation is not aware of any instance where a person with a disability has experienced any diffi culty in accessing any policy, program or service it offered.

Indemnities and insurance premiums for offi cers

The Corporation has Directors’ and Offi cers’ Liability insurance but the insurer has recommended that details of the policy and the premium paid not be disclosed. No indemnities have been provided to any current or former offi cers against any liabilities.


THE WINE INDUSTRYWORLD WINE PRODUCTION

The latest global dataset available is for the 2005 vintage. The Global Wine Statistical Compendium 1961 to 2005 reports that in 2005, 28 billion litres of wine were produced in the world, a 6% decrease on the year before. This follows a 12% increase in 2004.

France the largest producer

The top fi ve wine producers in the world in 2005 were France (5.5 billion litres), Italy (4.9 billion litres), Spain (3.3 billion litres), the United States (2.5 billion litres) and Argentina (1.5 billion litres). Together they accounted for 63% of the wine produced in the world, down 1% on the year before.

Australia was the sixth largest wine producer with 1.4 billion litres, just behind Argentina but still well behind the US. Australia accounted for 5% of world production.

Production decreases in top 5 EU countries

The decline in global production was largely due to declines within the European Union (EU). Production by the top fi ve EU countries declined 11% to 15 billion litres in 2005. This follows a 16% increase in production in this category in the previous year. However, since 2000, production in the top fi ve EU countries has declined by a compound annual rate of 3%.

The share of global wine production held by the EU is also in decline. In 2005, the top fi ve EU countries accounted for 54% of world wine production, down 3% on the previous year.

The fi ve largest EU producers in 2005 were France (5.5 billion litres), Italy (4.9 billion litres), Spain (3.3 billion litres), Germany (898 million litres) and Portugal (577 million litres).

Production increases in top 5 New World countries

While wine production in the EU declined, production by the top fi ve New World countries increased 4% to 7 billion litres in 2005. Since 2000, production by the top fi ve New World countries has grown at a compound annual rate of 3%. This is in contrast to the rate of decline in the top fi ve EU producers.

The share of the global wine production held by the top fi ve New World countries is on the rise, with a 26% share, up 3% on the previous year. In 1995, the share held by these countries was 20%.

The fi ve largest New World producers in 2005 were the US (2.5 billion litres), Argentina (1.5 billion litres), Australia (1.4 billion litres), South Africa (905 million litres) and Chile (805 million litres).

US the largest increase, Spain the largest decline

The major contributors to the decline in global production were Spain, Italy and France. Spain recorded the largest decline with production falling by 860 million litres. Italy decreased production by 420 million litres and France by 410 million litres. For all three countries, the decline in production followed an increase the year before.

However, there were signifi cant increases in production in the US, Chile, and China in 2005. The largest increase was in the US where production increased by 314 million litres. Chile was a distant second with an increase of 150 million litres. Production in Chile has been increasing by a compound annual rate of 4% since 2000. Production in China increased by 74 million litres to 731 million litres, and has almost doubled since 1995.

While Australian production declined by 37 million litres in 2005 to 1.4 billion litres, it was still the second largest production on record for the country.

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40Figure 5, World Wine Production and Exports

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WORLD WINE TRADE

Global trade in wine grew 1% to 8 billion litres in 2005 (Global Wine Statistical Compendium 1961 to 2005). Value growth continued with wine exports up 3% to US$21 billion due to a 2% increase in average price to US$2.54 per litre.

Italy the largest exporter

The top fi ve wine exporters in 2005 were Italy (1.6 billion litres), France (1.5 billion litres), Spain (1.4 billion litres), Australia (702 million litres) and Chile (422 million litres). Together, they accounted for 70% of world trade, up marginally on the previous year.

Italy jumped over France and Spain to take the top spot. While exports from Italy grew 10%, French exports declined marginally and Spanish exports declined 2%. Driving the growth in Italian exports was a 29% increase in exports to the UK which, at 221 million litres, is the third largest destination for Italian wine behind Germany (556 million litres) and the US (224 million litres). These three markets accounted for 64% of Italian exports in 2005.

Australia was the fourth largest exporter in the world and the largest exporter of the top fi ve New World countries, with exports of 702 million litres in 2005.

Average export price higher for EU than New World

Exports from the top fi ve EU countries were valued at US$13.7 billion, a marginal increase on the year before. The average unit value grew 2% to US$2.77 per litre. France led the way with the highest average unit value of US$4.71 per litre, an increase of 2% on the previous year.

Exports from the top fi ve New World countries grew 4% to US$4.5 billion. The average unit value grew 2% to US$2.27 per litre. Australia led the way in this group with the highest average unit value of US$3.03 per litre, a decrease of 4% on the previous year, partially as a result of the increase of bulk shipments in Australia’s export mix.

Bottled exports increase

Bottled wine exports grew 1% to 4.9 billion litres, or 60% of global wine trade. The top exporters of bottled wine in 2005 were Italy (997 million litres), France (981 million litres), Australia (520 million litres), Spain (493 million litres) and Chile (274 million litres).

Exports of bottled wines by the top fi ve EU countries increased by 39 million litres to 2.8 billion litres. The largest increase was from Italy with a signifi cant 106 million litre increase. Conversely, bottled wine exports from France declined 24 million litres to 1 billion litres and Spain declined 15 million litres to 493 million litres.

In 2005, Australia continued to be the largest exporter of bottled wine among the top fi ve New World countries with 520 million litres. Chile was second with 274 million litres, followed by the US with 227 million litres, South Africa with 199 million litres and Argentina 138 million litres.

The top fi ve New World countries collectively decreased exports of bottled wine by 23 million litres to 1.4 billion litres. However, of the top fi ve, only the US experienced a decline in bottled exports – by 70 million litres. The largest increase came from Argentina with an additional 25 million litres shipped. Australia increased bottled exports by 19 million litres, Chile by 3 million litres, and South Africa by 300,000 litres. In all fi ve countries, bottled wine comprised the major share of exported wines. Bottled exports by producers in the rest of the world increased by a combined 16 million litres.

Bulk exports increase

Bulk wine exports increased 1% to 2.8 billion litres, or 35% of global world trade. The top fi ve exporters of bulk wine in 2005 were Spain (874 million litres), Italy (491 million litres), France (332 million litres), Australia (169 million litres) and Chile (147 million litres).

Bulk wine exports by the EU group decreased by 31 million litres to 1.7 billion litres. The major contributor to the net decrease was

Figure 6, Production EU and New World

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Figure 7, Changes in World Wine Between 2004 and 2005

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THE WINE INDUSTRY (CONTINUED)

Portugal, with a signifi cant decrease of 90 million litres. In all countries except Spain, bottled wine comprised the major share of exported wines.

Bulk wine exports increased collectively in the top fi ve New World countries by a total of 55 million litres to 617 million litres. The most signifi cant increase was in Australia, with bulk shipments increasing by 38 million litres to 169 million litres, followed by Argentina with an additional 28 million litres to reach 80 million, the US with 27 million litres to reach 112 million litres, and South Africa with 17 million litres to reach 109 million litres. Chile decreased exports of bulk wine by 56 million litres to 147 million litres.

Sparkling exports decline

Sparkling wine exports declined 2% to 423 million litres, or 5% of global wine trade. The top fi ve exporters of sparkling wine in 2005 were France (165 million litres), Italy (87 million litres), Spain (76 million litres), Germany (14 million litres) and Australia (12 million litres).

Sparkling wine exports from the top fi ve EU countries declined by 14 million litres to 343 million litres and accounted for around 80% of global sparkling wine exports. The largest decline was in Spain, down 23 million litres to 76 million litres. In contrast, sparkling wine exports from France grew 4 million litres to 165 million litres. France consolidated its position as the number one exporter of sparkling wine in the world.

Sparkling wine exports by the top fi ve New World countries increased by 3 million litres to 28 million litres. The largest increase was from Australia – by 2.4 million litres to 12.8 million litres. In contrast, sparkling wine exports from the US declined by half a million litres to 9 million litres.

AUSTRALIAN WINE PRODUCTION

Australia’s winegrape production is expected to be 1.42 million tonnes in 2007 based on the most current estimate (Winemakers’ Federation of Australia – 2007 WFA Vintage Report). This equates to a 25% reduction on last season’s crush and the smallest vintage since 2003. The red winegrape intake decreased 35% to 678,000 tonnes while the white intake fell 14% to 741,000 tonnes.

Yields down

Unprecedented seasonal conditions signifi cantly reduced yields (tonnes per hectare) to a 30-year low this season. The national vineyard was subjected to drought, frost, and bushfi re taint. As a consequence, yields (based on the tonnes crushed) in 2007 are expected to be around 27% lower than last year and the lowest since 1976. Reds were more affected than whites with yields down 37% on last year compared to a 15% decline in whites.

The yield reduction this year will be only marginally offset by an expected increase in bearing areas of around 2%. This follows at least fi ve years of subdued planting in the industry.

A number of factors contributed to the greater reduction in red yields. Firstly, cooler-climate regions have a higher proportion of reds than the warm inland districts (accounting for nearly two-thirds of the total red bearing area). In addition, yields in the cooler regions were more affected than those in the warm-inland districts because the incidence of frost was greater in the former, compounding the affects of drought felt across all regions. Secondly, adverse weather conditions, mainly drought, appear to have had a bigger impact on reds – most likely because they had a

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8Figure 8, Global Wine Trade

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Figure 9, Value of Wine Exported

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World Trade

2004


greater exposure, being generally later-ripening varieties. Thirdly, some growers made a commercial decision to divert limited water supplies to the whites, particularly early in the season.

Drought, frosts and smoke taint

The major seasonal infl uence on the 2007 crop was the severe drought conditions experienced across much of the country. In both warm-inland and cooler-climate regions, rainfall and the number of rain days were well below average while temperatures were above average for most of the season.

A dry winter followed by a dry and signifi cantly warmer than average spring resulted in moisture-defi cient soil profi les, placing early-season stress on vines. Many regions were forced to irrigate early, resulting in less water being available later in the season during the ripening period. Also, the dry conditions towards the end of 2006 increased the severity of frost events, particularly in some cooler-climate regions in south eastern South Australia, Victoria and Tasmania. An episode of rain in mid-January improved the situation for many growers by refreshing the vines but warm inland regions received further cuts in their water allocations.

Grapes not left on the vine

While the past two seasons have seen grapes left on the vine or dropped at harvest (an estimated 55,000 tonnes in 2005 and 130,000 tonnes in 2006), it is unlikely that any of the 2007 crop were left on the vine. The exception will be for rare batches of fruit that are diseased or damaged or where it is uneconomical to harvest. In contrast, it is understood that small amounts of table and drying grapes were diverted for crushing for wine.

Chardonnay overtakes Shiraz

The top fi ve varieties crushed in 2007 were Chardonnay, Shiraz, Cabernet Sauvignon, Merlot and Semillon. Refl ecting the greater impact of season conditions on reds compared to whites, Chardonnay overtook Shiraz as the major grape variety and was well ahead of Cabernet Sauvignon. Chardonnay intake decreased by 8% to 395,000 tonnes, 28% of the total crush. The intake of Shiraz decreased 36% to 293,000 tonnes, representing 21% of the total crush. The Cabernet Sauvignon intake declined 36% to 187,000 tonnes, accounting for 13% of the total crush. Merlot dropped by 29% to 96,000 tonnes, or 7% of the total crush, while Semillon decreased by 25% to 77,000 tonnes, a 5% share of the total crush.

Whilst representing just under 2% of the total intake, Doradillo, Pinot Gris/Grigio and Viognier were the only reported varieties to achieve an increased intake in 2007.

Prospects for 2008 vintage

The harsh weather conditions will have fl ow-on effects for the 2008 vintage. The stressing of vines in some regions has inhibited the development of primordial buds for next year’s vintage, lowering potential yields.

The Murray-Darling river system, which irrigates over 60% of Australia’s grape bearing area, faces the prospect of serious water allocation reductions. While water allocations will not be known for certain until later in the season, during the ripening period, the Murray-Darling Basin Commission reported that while rainfall was average to above average for June, there is the need for ‘signifi cant persistent’ rainfall in the upcoming months to increase water allocations. Even with above average rainfall this year, it is likely to take several years for water storage levels to return to the historical average. This means that the industry anticipates yields will be below average again in 2008.



AUSTRALIAN DOMESTIC MARKET

Domestic sales of Australian wine grew 3.9% or 17 million litres to reach 449 million litres in 2006–07. In contrast, imported wine sales grew 27% or 7 million litres to reach 34 million litres. Imports accounted for 7% of total domestic consumption, an increase of 1%. Total domestic consumption (Australian wine plus imports) grew 5% to reach 484 million litres.

Red the major growth contributor

Red still wine was the major contributor to growth in domestic sales of Australian wine in 2006–07, increasing 8.7 million litres to 163 million litres. This follows a 1.3 million reduction in red still wine sales in 2005–06. White still wine followed, with a 6.2 million litre increase to 219 million litres. Sparkling wine sales also grew, up 3 million litres to 43 million litres.

Bottled red outsold white

After growing just 2% in 2005–06, domestic sales of Australian bottled wine recovered strongly in 2006–07, up 10% to 204 million litres. Driving the growth was a revival in bottled red wine, which outsold bottled whites, reversing the 2005–06 result.

Sales of bottled red wine increased 12% to 103 million litres after growing just under 1% in the previous year. Bottled reds accounted for 59% of the growth in total bottled sales.

Strong growth in the sales of bottled white wine continued, rising 8% to 101 million litres compared to 3% in the previous year. Bottled whites contributed 41% of the growth in total bottled sales.

After outselling soft-packs for the fi rst time in 2005–06, bottled wine sales increased their share of domestic sales of Australian wine by 2% in 2006–07 to 45%. In contrast, the soft-pack share declined 2% to 39%.

Soft-pack sales decline

Soft-pack sales declined for the third successive year, falling 3% to 179 million litres. White soft-pack wine sold at twice the rate of red but declined 2% to 116 million litres. Red soft-pack wine sales declined 6% to 57 million litres, while fortifi ed soft-pack sales declined 5% to 8 million litres.

The soft-pack share of domestic Australian red wine sales declined 5% to 35%, with bottled product up 3% to 63%. While soft-packs still hold the major share of white wine sales at 53%, the category lost 3% to white bottled sales, with a 46% share.

Sparkling, fortifi ed and brandy

Sales of Australian sparkling wine rose 7% to 43 million litres to account for almost 10% of all Australian wine sales. Bulk fermented sparkling accounted for nearly all of the 3 million litre growth.

However, fortifi ed wine sales continued to decline, down 6% to 17 million litres. The fortifi ed share of total wine sales has halved in the past decade, representing just 4% of total Australian wines sales in 2006–07, compared to 8% 10 years ago. Australian brandy sales declined a further 5% to 510,000 litres.

Imported wine sales strong

Imported wines increased their strong presence in the Australian domestic market with a 27% growth in 2006–07. Imported wine as a proportion of total domestic consumption increased 1% to 7%. White wine dominated this growth, increasing by nearly 50% to account for over half of total imports. Unrelenting consumer demand for its Sauvignon Blanc saw New Zealand increase imports by 37% (with white wine accounting for nine out of every 10 bottles). Sparkling wine grew 19% to reach 7 million litres. French sparkling wine imports grew 2% to 2.8 million litres, but were surpassed by Italian sparkling, which jumped 21% to 2.9 million litres.

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Figure 10, Wine Sales in Australia

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AUSTRALIAN WINE EXPORTS

In 2006–07, Australian export volumes grew 8% to 798 million litres and value grew 7% to a record A$2.99 billion. However, the average price per litre declined 1% to A$3.75 per litre, representing the sixth consecutive year of decline.

The rate of decline in the average price per litre eased in 2006–07, falling from 9% the year before to 8%, and accelerating the rate of value growth from 2% to 5%. However, the rate of volume growth declined 3% from the 11% recorded last year.

There were three key drivers of the outcomes for Australian wine shipments in 2006–07. All are positive trends for the Australian wine sector, albeit early in their development, after a period of supply and price pressures and support the industry’s aims of entering a period of value-growth. The key drivers were:

• a resurgence in the growth of bottled shipments (particularly reds)

• an increase in the average price of bottled shipments

• an easing of growth in bulk shipments.

Bottled shipment revival

After growing just 2% last year, bottled wine shipments grew 5% to reach 556 million litres in 2006–07. Value grew 7% to A$2.72 billion, after remaining stable the year before. Bottled wine shipments continued to hold the major share of Australian wine shipments representing 70% of the total volume and 91% of the total value. Reds accounted for the major share with a 63% share followed by whites at 34%, sparkling at 3% and other categories at less than 1%.

The growth in bottled volume was driven by a revival in bottled red shipments. Bottled red growth increased from less than 1% last year to 6% this year and accounted for 86% of the growth in bottled product. Accounting for just over three quarters of the bottled red growth were China, the UK, Netherlands, the US and New Zealand. In contrast, growth in bottled white shipments slowed with growth falling from 3% last year to 1%.

Increase in average bottled wine prices

Average bottled wine prices increased 2% to $4.89 per litre in 2006–07, the largest increase for eight years after three years of declines of 2% or more. The resurgence in demand for bottled Australian red wine was refl ected in the prices, with average price increasing 3% to A$5.17 per litre. The average bottled white price also increased but by a smaller 1% to A$4.30 per litre.

Easing of bulk shipments

Growth in bulk wine shipments eased in 2006–07, with a growth rate of 20% compared to 54% last year. Bulk shipments at 226 million litres represented 28% of total wine volume exported for the year (but just 8% of the value). Although slowing, bulk shipments nevertheless still accounted for just over 60% of the volume growth. While the share of bulk wine in the mix is higher than in recent years, it is lower than in the early 1990s, when bulk wine held around a third share of wine exports.

Red wine accounted for 60% of bulk shipments and white wine 40%, roughly the same split as last year. Nearly 85% of the bulk wine was shipped to fi ve destinations – the UK, the US, Germany, China and New Zealand. While the growth rate in bulk shipments to the UK and New Zealand increased, growth declined signifi cantly in shipments to the US, Germany and China. Bulk shipments to the UK, the leading bulk destination with around a third share, were assisted by UK government incentives designed to reduce the shipment of glass into the country for environmental reasons.

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Figure 12, Australian Wine Sales

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Overseas consumers “trading up”

Overseas consumers of Australian wine appear to be “trading up”, with an upward shift in the price-point mix of Australian wine exports. An increase of 27%, or 29 million litres, in the A$5.00-to $7.49 per litre segment more than offset a decline of 7%, or 25 million litres, in the A$2.50 to $4.99 per litre bracket. Growth was also achieved in the highest price points with a 4 million litre, or 16%, increase in shipments in the A$7.50 to $9.99 per litre bracket, and a 3 million litre, or 15%, increase in the A$10.00 per litre and above bracket.

UK consolidates at No 1

The UK consolidated its position at year end as Australia’s number one export market in terms of both volume and value after being challenged during the year by the US for the position of number one market by value. A volume of 281 million litres worth A$974 million was exported to the UK in 2006–07. Growth in the market recovered somewhat after slowing the year before. Volume grew 4% compared to 3% the previous year while value increased 1% after declining 1% in the year before.

Driving volume growth was a 19% increase in shipments in the under A$2.50 per litre bracket (principally bulk wine), with the share held by this price segment increasing 4% to 34%. This increase partially offset a 5% decline in the A$2.50 to $4.99 per litre segment, which fell 4% to 50%. The two highest price points, A$7.50 to $9.99 per litre and A$10.00 per litre and above, achieved strong growth rates of 30% and 32% respectively, albeit off lower bases.

On balance, from increased volumes at the lower and higher ends of the price scale, the average price for shipments to the UK fell 3% to $3.47 per litre (FOB).

US No 2

Shipments to the US, Australia’s second largest market, grew 3% to 220 million litres and value grew 6% to A$960 million. The average price per litre increased 3% to A$4.36. The increase in average price was infl uenced by a shift in the mix from lower to higher price points. The share of shipments below A$5 per litre declined 10% to 68% in favour of the share held by shipments at A$5.00 per litre and above, which rose to a 32% share. Key to the shift was a 23 million litre decline in the A$2.50 to $4.99 per litre bracket, almost offset by a 21 million litre increase in the A$5.00 to $7.49 per litre bracket, and the balance accounting for a small increase in the sub-$2.50 per litre (mainly bulk) bracket.

Record value to Canada

Canada was the third largest market for Australian wine exports in 2006–07. While the volume shipped declined 3% to 49 million litres, value grew 7% to a record A$266 million. The value growth refl ected a 10% increase in average price per litre to A$5.39 which in turn refl ected a 5 million litre decline in shipments below A$2.50 per litre being largely offset by a 4 million litre increase in the A$5.00 to $7.49 price point. Growth in the two highest price points contributed to the increase in the average price of shipments to Canada in 2006–07.

China more prominent

China was the second largest contributor to both volume and value growth in 2006–07 following the UK (largest contributor to volume growth) and the US (largest contributor to value growth). Volume grew 90% to 23 million litres and value grew 136% to A$49 million. The average price per litre of wine increased by 24% to A$2.14 per litre after declining 62% last year.

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Figure 13, Australian Wine Export Approvals Major Destinations

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Figure 14, MAT Export Performance

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The growth rate in bulk shipments to China declined signifi cantly in 2006–07, from 1354% to 64%, resulting in the share of bulk shipments in the mix dropping 11% to 67%. While accounting for 89% of the volume growth in 2005–06, bulk shipments accounted for 55% of the growth in 2006–07. Conversely, there was an increased rate of growth in bottled shipments to China, which grew 173% to 7 million litres, with the share of bottle product in the mix increasing 10% to 31%. Bottled shipments accounted for 41% of the volume growth in China this year after contributing just 11% last year.

Netherlands and Ireland contribute to growth

The Netherlands was ranked third in contribution to value growth and fourth in volume growth. Value grew by A$20 million to reach A$65 million and volume grew 7 million litres to reach 22 million litres.

Ireland was the fi fth ranked market in terms of the value of wine shipped in 2006–07. Value grew 30% to A$70 million while volume 28% to 15 million litres. The average price per litre increased by 2% to A$4.67.

OUTLOOK FOR AUSTRALIAN WINE

After three successive seasons of above-trend yields per hectare, low vineyard yields in 2007 are providing the opportunity for the Australian wine sector to begin the task of drawing down excess stocks. Yields per hectare in 2007 were around 30% down on the average of the three preceding years. With the volume of 2006–07 sales up 7%, a signifi cant reduction of the over-500 million litres of excess stock is expected.

2008 harvest

There is a reasonable expectation that the 2008 harvest will be a low again. This is expected to fully deplete excess stocks and in fact, leave the Australian wine sector with less than desirable stock holdings. A low 2008 harvest is principally expected because of signifi cantly depleted water reserves in the catchment areas supplying warm inland winegrowing districts. Importantly, normal or even above-normal 2007 winter and spring rains would not replenish these reserves suffi ciently to allow full allocations of irrigation water.

Back in balance?

While low harvests in 2007 and 2008 would provide the Australian wine sector an opportunity to regain balance, the outcomes beyond 2008 are much less clear. A return to average yields may leave the sector undersupplied or could drive it back into oversupply. An assessment of the likelihood of these two alternatives is complicated by the combined uncertainties of supply in the current extraordinary seasonal conditions, and their aftermath, and the immediate demand-side challenges posed by world wine oversupply, increasing competition in world wine markets and unfavourable exchange rates.

Exports (798 ML)

Imports (34 ML)



No need to plant

While undersupply is anticipated out of the 2008 season, this prospect does not necessarily herald a need for plantings to redress the balance (beyond the need for continued plantings to meet emerging demand for regional or varietal wines not catered for in existing vineyards). Further clarity about planting requirements should emerge from assessments of supply and demand status in the post-2008 harvest period. Assessments at this time should provide suffi cient time to make planting decisions to meet future demand in 2010–11.

Focus on value

Export outcomes for 2006–07, strongly infl uenced by shifts that occurred in the latter half of the year, show trends that give every encouragement to the value growth ambitions of Directions to 2025.

While still in the early stages of development, the trend was for not only the recent dominance of bulk shipments to abate, but for bottled shipments to revive at the same time as drawing higher prices. Importantly, the slowing of bulk shipments as stock excesses are drawn down gives the industry an opportunity to re-focus consumers on Australia’s high-end offer, continuing a trend commenced in 2006–07. The sum of growth in each of the premium, super-premium and specialty price segments ($5 per litre FOB and above) outweighed a decline in the popular premium ($2.50 to $4.99 per litre FOB) shipments that have for some years been the engine of growth in Australian wine shipments.

New markets

Directions to 2025 identifi ed the US, the UK and Canada as the key markets for growth over the medium term. With nearly two-thirds of 2006–07 Australian wine sales concentrated in the fi rst two of these markets, the Australian wine sector is seeking to diversify its reach. Developing new and emerging markets for wine will be important to this ambition and China, South Korea and Russia are high priority.

Conclusion

The ability of the Australian wine sector to draw down excess stocks over the next two years presents a window of opportunity to emerge from a period of sustained supply growth and focus on the aim, as stated in Directions to 2025, of entering a phase of value growth. This would deliver more sustainable and profi table sales by recovering margins lost in recent years through supply pressures.


CONTENTSIndependent Auditor’s Report 52

Statement by Corporation Members and Chief Executive 53

Income Statement 54

Balance Sheet 55

Statement of Changes in Equity 56

Statement of Cash Flows 57

Schedule of Commitments 58

Schedule of Contingencies 59

Notes to and Forming Part of the Financial Statements 60

FINANCIAL STATEMENTSfor the year ended 30 June 2007

FINANCIAL STATEMENTS


INDEPENDENT AUDITOR’S REPORT

To the Minister for Agriculture, Fisheries and Forestry

Scope

I have audited the accompanying fi nancial statements of the Australian Wine and Brandy Corporation (the Corporation) for the year ended 30 June 2007, which comprise: a statement by the Corporation Members and Chief Executive; income statement; balance sheet; statement of changes in equity; statement of cash fl ows; schedules of commitments and contingencies; a summary of signifi cant accounting policies; and other explanatory notes.

The Responsibility of the Members’ for the Financial Statements

The Members’ of the Corporation are responsible for the preparation and fair presentation of the fi nancial statements in accordance with the Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997 and the Australian Accounting Standards (including the Australian Accounting Interpretations). This responsibility includes establishing and maintaining internal controls relevant to the preparation and fair presentation of the fi nancial statements that are free from material misstatement, whether due to fraud or error; selecting and applying appropriate accounting policies; and making accounting estimates that are reasonable in the circumstances.

Auditor’s Responsibility

My responsibility is to express an opinion on the fi nancial statements based on my audit. My audit has been conducted in accordance with the Australian National Audit Offi ce Auditing Standards, which incorporate the Australian Auditing Standards. These Auditing Standards require that I comply with relevant ethical requirements relating to audit engagements and plan and perform the audit to obtain reasonable assurance whether the fi nancial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the fi nancial statements. The procedures selected depend on the auditor’s judgement, including the assessment of the risks of material misstatement of the fi nancial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the Corporation’s preparation and fair presentation of the fi nancial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Corporation’s internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by the Members, as well as evaluating the overall presentation of the fi nancial statements.

I believe that the audit evidence we have obtained is suffi cient and appropriate to provide a basis for my audit opinion.

GPO Box 707 CANBERRA ACT 260119 National Circuit BARTON ACT 2600Phone (02) 6203 7300 Fax (02) 6203 7777


STATEMENT BY CORPORATION MEMBERS AND CHIEF EXECUTIVEIn our opinion, the attached fi nancial statements for the year ended 30 June 2007 are based on properly maintained fi nancial records and give a true and fair view of the matters required by the Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997.

In our opinion, at the date of this statement, there are reasonable grounds to believe that the Corporation will be able to pay its debts as and when they become due and payable.

This statement is made in accordance with a resolution of the Members of the Australian Wine and Brandy Corporation.

John C Moore AO Angus M Kennedy Sam TolleyChairman Deputy Chairman Chief Executive8 August 2007 8 August 2007 8 August 2007

Independence

In conducting the audit, I have followed the independence requirements of the Australian National Audit Offi ce, which incorporate the ethical requirements of the Australian accounting profession.

Auditor’s Opinion

In my opinion, the fi nancial statements of the Australian Wine and Brandy Corporation:

a) have been prepared in accordance with the Finance Minister’s Orders made under the Commonwealth Authorities and Companies Act 1997, and the Australian Accounting Standards (including the Australian Accounting Interpretations); and

b) give a true and fair view of the matters required by the Finance Minister’s Orders including the Australian Wine and Brandy Corporation’s fi nancial position as at 30 June 2007 and of its fi nancial performance and its cash fl ows for the year then ended.

Australian National Audit Offi ce

Mark A MoloneySenior DirectorDelegate of the Auditor-General

Canberra

21 August 2007



INCOME STATEMENTfor the year ended 30 June 2007

NOTE 2007 $’000 2006 $’000

INCOME

Revenue

Sale of goods and rendering of services 4A 6,606 6,124

Interest 4B 136 156

Rental income 4C 60 –

Industry contributions 4D 9,342 10,287

Other revenue 4E 390 420

Total revenue 16,534 16,987

Gains

Sale of assets 4F – 1

Foreign exchange 4G – 39

Other gains 4H – 128

Total gains – 168

Total Income 16,534 17,155

EXPENSES

Employees benefi ts 5A 5,560 4,997

Suppliers 5B 10,112 11,947

Depreciation and amortisation 5C 453 382

Finance costs 5D 1 –

Write-down and impairment of assets 5E 53 4

Foreign exchange losses 5F 113 –

Losses from asset sales 5G 3 –

Total Expenses 16,295 17,330

Surplus (Defi cit) attributable to the Australian Government 239 (175)

The above statement should be read in conjunction with the accompanying notes.


BALANCE SHEETas at 30 June 2007

NOTE 2007 $’000 2006 $’000

ASSETS

Financial Assets

Cash and cash equivalents 6A 2,552 2,252

Trade and other receivables 6B 2,113 2,700

Total fi nancial assets 4,665 4,952

Non-Financial Assets

Land and buildings 7A 417 425

Infrastructure, plant and equipment 7B 417 491

Intangibles 7D 422 239

Inventories 7E 67 6

Other non-fi nancial assets 7F 39 232

Total non-fi nancial assets 1,362 1,393

Total Assets 6,027 6,345

LIABILITIES

Payables

Suppliers 8A 972 1,785

Other payables 8B 303 225

Total payables 1,275 2,010

Provisions

Employee provisions 9A 808 696

Other provisions 9B 151 128

Total provisions 959 824

Total Liabilities 2,234 2,834

Net Assets 3,793 3,511

EQUITY

Retained surplus 3,605 3,366

Reserves 188 145

Total Equity 3,793 3,511

Current Assets 4,731 5,190

Non-Current Assets 1,295 1,155

Current Liabilities 1,957 2,481

Non-Current Liabilities 277 353




STATEMENT OF CHANGES IN EQUITYfor the year ended 30 June 2007

RETAINED EARNINGSASSET REVALUATION

RESERVETOTAL

EQUITY

2007 $’000

2006 $’000

2007$’000

2006$’000

2007$’000

2006$’000

Opening balance 3,366 3,541 145 145 3,511 3,686

Adjustment for changes in accounting policies – – – – – –

Adjusted opening balance 3,366 3,541 145 145 3,511 3,686

Income and expense

Revaluation adjustment – – 43 – 43 –

Sub-total income and expenses recognised directly in equity – – 43 – 43 –

Surplus (Defi cit) for the period 239 (175) – – 239 (175)

Total income and expenses 239 (175) 43 – 282 (175)

Closing balance attributable to the Australian Government 3,605 3,366 188 145 3,793 3,511



STATEMENT OF CASH FLOWSfor the year ended 30 June 2007

NOTE 2007 $’000 2006 $’000

OPERATING ACTIVITIES

Cash Received

Goods and services 8,470 7,155

Interest 127 156

Industry contributions 9,460 10,078

Other cash received 150 150

Total cash received 18,207 17,539

Cash Used

Employees (5,734) (5,634)

Suppliers (11,293) (12,332)

Borrowing costs (1) –

Net GST paid (335) (193)

Total cash used (17,363) (18,159)

Net cash from or (used by) operating activities 10 844 (620)

INVESTING ACTIVITIES

Cash Received

Proceeds from sales of property, plant and equipment 2 1

Total cash received 2 1

Cash Used

Purchase of property, plant and equipment and intangibles (546) (351)

Total cash used (546) (351)

Net cash from or (used by) investing activities (544) (350)

Net increase or (decrease) in cash held 300 (970)

Cash at the beginning of the reporting period 2,252 3,222

Cash at the end of the reporting period 10 2,552 2,252




SCHEDULE OF COMMITMENTSas at 30 June 2007

2007 $’000 2006 $’000

BY TYPE

Commitments Receivable

Sublease rental income (100) (181)

GST recoverable on commitments (124) (171)

Total commitments receivable (224) (352)

Other Commitments

Operating leases1 1,857 2,363

Total other commitments 1,857 2,363

Net commitments by type 1,633 2,011

BY MATURITY

Operating Lease Commitments

One year or less 633 708

From one to fi ve years 1,224 1,655

Total operating lease commitments 1,857 2,363

Commitments receivable (224) (352)

Net commitments by maturity 1,633 2,011

NB: Commitments are GST inclusive where relevant. Recoveries due from the taxation authority in relation to commitments payable are disclosed as commitments receivable.

1The amount reported as operating lease commitments comprises:

Nature of lease General description of leasing arrangement

Leases for offi ce accommodationLease payments are fi xed with terms varying from 3 years to 5 years and includes leases of four overseas offi ces.

Motor Vehicles – senior executives Lease terms vary between 2 and 3 years with no renewal or purchase options available.

Premises Car ParksCar Park leases exist for two sites of the Corporation and are fi xed for 5 years. Available spaces are sublet to staff at commercial rates.

Computer Equipment Computer equipment under lease are for a period of 3 years with no option to purchase.

Computer Equipment – Austrade Computer equipment under lease are for a period of 2.5 years with no option to purchase.

Telephone SystemThe telephone system lease term is 5 years with a 5 year maintenance agreement in place to provide prompt service as required. There are no cancellation, renewal, or purchase options.

The above schedule should be read in conjunction with the accompanying notes.


SCHEDULE OF CONTINGENCIESas at 30 June 2007

GUARANTEES INDEMNITIESCLAIMS FOR DAMAGES

OR COSTS TOTAL

2007 $’000

2006 $’000

2007 $’000

2006 $’000

2007 $’000

2006 $’000

2007 $’000

2006 $’000

Contingent Assets

Balance from previous year – – – – – – – –

New – – – – – – – –

Re-measurement – – – – – – – –

Assets crystallised – – – – – – – –

Expired – – – – – – – –

Total contingent assets – – – – – – – –

Contingent Liabilities

Balance from previous year 45 45 – – – – 45 45

New – – – – – – – –

Re-measurement – – – – – – – –

Liabilities crystallised – – – – – – – –

Obligations expired – – – – – – – –

Total contingent liabilities 45 45 – – – – 45 45

Net Contingent Assets (Liabilities) (45) (45) – – – – (45) (45)

Details of each class of contingent liabilities and assets, including those not included above because they cannot be quantifi ed, are disclosed in Note 11: Contingent Liabilities and Contingent Assets.

The above schedule should be read in conjunction with the accompanying notes.



NOTES TO AND FORMING PART OF THE FINANCIAL STATEMENTSfor the year ended 30 June 2007

NOTE DESCRIPTION

1 Summary of Signifi cant Accounting Policies

2 Events after the Balance Sheet Date

3 Economic Dependency

4 Income

5 Expenses

6 Financial Assets

7 Non Financial Assets

8 Payables

9 Provisions

10 Cash Flow Reconciliation

11 Contingent Liabilities and Assets

12 Remuneration of Members

13 Related Party Disclosures

14 Remuneration of Executives

15 Remuneration of Auditors

16 Average Staffi ng Levels

17 Financial Instruments

18 Compensation and Debt Relief

19 Reporting by Outcomes


1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

1.1 Basis of Preparation of the Financial Report

The fi nancial statements and notes are required by clause 1(b) to the Commonwealth Authorities and Companies Act 1997 and are a General Purpose Financial Report.

The Financial Statements and notes have been prepared in accordance with:

• Finance Minister’s Orders (or FMOs) for reporting periods ending on or after 1 July 2006; and

• Australian Accounting Standards and Interpretations issued by the Australian Accounting Standards Board (AASB) that apply for the reporting period.

The fi nancial report has been prepared on an accrual basis and is in accordance with the historical cost convention, except for certain assets at fair value. Except where stated, no allowance is made for the effect of changing prices on the results or the fi nancial position.

The fi nancial report is presented in Australian dollars and values are rounded to the nearest thousand dollar unless otherwise specifi ed.

Unless an alternative treatment is specifi cally required by an Accounting Standard or the FMOs, assets and liabilities are recognised in the Balance Sheet when and only when it is probable that future economic benefi ts will fl ow to the Corporation and the amounts of the assets or liabilities can be reliably measured. However, assets and liabilities arising under agreements equally proportionately unperformed are not recognised unless required by an Accounting Standard. Liabilities and assets that are unrealised are reported in the Schedule of Commitments and the Schedule of Contingencies (other than unquantifi able contingencies, which are reported at Note 11).

Unless alternative treatment is specifi cally required by an accounting standard, revenues and expenses are recognised in the Income Statement when and only when the fl ow, consumption or loss of economic benefi ts has occurred and can be reliably measured.

1.2 Signifi cant Accounting Judgements and Estimates

In the process of applying the accounting policies listed in this note, the Corporation has made no judgements that have signifi cant impact on the amounts recorded in the fi nancial statements.

No accounting assumptions or estimates have been identifi ed that have a signifi cant risk of causing a material adjustment to carrying amounts of assets and liabilities within the next accounting period.

1.3 Statement of Compliance

Australian Accounting Standards require a statement of compliance with International Financial Reporting Standards (IFRSs) to be made where the fi nancial report complies with these standards. Some Australian equivalents to IFRSs and other Australian Accounting Standards contain requirements specifi c to not-for-profi t entities that are inconsistent with IFRS requirements. The Corporation is a not-for-profi t entity and has applied these requirements, so while this fi nancial report complies with Australian Accounting Standards including Australia Equivalents to International Financial Reporting Standards (AEIFRSs) it cannot make this statement.

Adoption of new Australian Accounting Standard requirements

No accounting standard has been adopted earlier than the effective date in the current period.

Other effective requirement changes

The following amendments, revised standards or interpretations have become effective but have no fi nancial impact or do not apply to the operations of the Corporation.

Amendments:

• 2005-1 Amendments to Australian Accounting Standards [AASBs 1, 101, 124]

• 2005-4 Amendments to Australian Accounting Standards [AASBs 1, 132, 139, 1023, 1038]

• 2005-5 Amendments to Australian Accounting Standards [AASBs 1, 139]

• 2005-9 Amendments to Australian Accounting Standards [AASBs 4, 132, 139, 1023]



• 2005-6 Amendments to Australian Accounting Standards [AASB 3]



Interpretations:

• UIG 4 Determining whether an Agreement contains a Lease

• UIG 5 Rights to Interest arising from Decommissioning, Restoration and Environmental Rehabilitation Funds

• UIG 7 Applying the Restatement Approach under AASB 129 Financial Reporting in Hyperinfl ationary Economies

• UIG 8 Scope of AASB 2

• UIG 9 Reassessment of Embedded Derivatives

Future Australian Accounting Standard requirements

The following new standards, amendments to standards or interpretations have been issued by the Australian Accounting Standards Board but are effective for reporting periods. It is estimated that the impact of adopting these pronouncements when effective will have no material fi nancial impact on future reporting periods.

Financial instrument disclosure

AASB 7 Financial Instruments: Disclosures is effective from reporting periods on or after 1 January 2007 (the 2007–08 fi nancial year) and amends the disclosure requirements for fi nancial instruments. In general AASB 7 requires greater disclosure than that presently. Associated with the introduction of AASB 7 a number of accounting standards were amended to reference the new standard or remove the present disclosure requirements through 2005-10 amendments to Australian Accounting Standards [AASB 132, AASB 101, AASB 114, AASB 117, AASB 133, AASB 139, AASB 1, AASB 4, AASB 1023 & AASB 1038]. These changes have no fi nancial impact but will effect the disclosure presented in future fi nancial reports.

Other

The following standards and interpretations have been issued but are not applicable to the operation of the Corporation.

• AASB 1049 Financial Reporting of General Government Sectors by Governments

• UIG 10 Interim Financial Reporting and Impairment

1.4 Revenue

Resources received free of charge

Resources received free of charge are recognised as gains when and only when a fair value can be reliably determined and the services would have been purchased had they not been donated. Use of these resources is recognised as an expense.

Resources received free of charge are recorded as either revenue or gains depending upon their nature.

Other types of revenue

Revenue from the sale of goods is recognised when:

• The risks and rewards of ownership have been transferred to the buyer;

• The seller retains no managerial involvement nor effective control over the goods;

• The revenue and transaction costs incurred can be reliably measured; and

• It is probable that the economic benefi ts associated with the transaction will fl ow to the entity.



Revenue from rendering of services is recognised by reference to the stage of completion of contracts at the reporting date. The revenue is recognised when:

• The amount of revenue, stage of completion and transaction costs incurred can be reliably measured; and

• the probable economic benefi ts with the transaction will fl ow to the Corporation.

The stage of completion of contracts at the reporting date is determined by reference to the proportion that costs incurred to date bear to the estimated total costs of the transaction.

Receivables for goods and services, which have 30 day terms, are recognised at the nominal amounts due less any provision for bad and doubtful debts. Collectability of debts is reviewed at balance date. Provisions are made when collectability of the debt is no longer probable.

Interest revenue is recognised using the effective interest method as set out in AASB 139 Financial Instruments: Recognition and Measurement.

1.5 Gains

Other resources received free of chargeResources received free of charge are recognised as gains when and only when a fair value can be reliably determined and the services would have been purchased had they not been donated. Use of these resources is recognised as an expense.

Contributions of assets at no cost of acquisition or for nominal consideration are recognised as gains at their fair value when the asset qualifi es for recognition, unless received from another Government Authority or Authority as a consequence of a restructuring of administrative arrangements

Resources received free of charge are recorded as either revenue or gains depending upon their nature.

Sale of assetsGains from disposal of non-current assets is recognised when control of the asset has passed to the buyer.

1.6 Employee Benefi tsLiabilities for services rendered by employees are recognised at the reporting date to the extent that they have not been settled.

Liabilities for ‘short-term employee benefi ts’ (as defi ned in AASB 119) and termination benefi ts due within twelve months of balance date are measured at their nominal amounts.

The nominal amount is calculated with regard to the rates expected to be paid on settlement of the liability.

All other employee benefi t liabilities are measured as the present value of the estimated future cash outfl ows to be made in respect of services provided by employees up to the reporting date.

LeaveThe liability for employee benefi ts includes provision for annual leave and long service leave. No provision has been made for sick leave as all sick leave is non-vesting and the average sick leave taken in future years by employees of the Corporation is estimated to be less than the annual entitlement for sick leave.

The leave liabilities are calculated on the basis of employees’ remuneration, including the Corporation’s employer superannuation contribution rates to the extent that the leave is likely to be taken during service rather than paid out on termination.

The liability for long service leave has been determined as an estimate of the present value of the liability taking into account attrition rates and pay increases through promotion and infl ation.

SuperannuationThe Corporation contributes to private superannuation plans for the majority of its employees and to the Public Sector Superannuation Scheme (PSS) for the remainder. The liability for the superannuation benefi ts under the PSS is recognised in the fi nancial statements of the Australian Government and is settled by the Australian Government in due course.

The principal types of benefi t provided for under the plans are accumulated retirement benefi ts for the private schemes and defi ned retirement benefi ts for the PSS.




The basis of contributions to the plans is, for private schemes – as determined by the Corporation, for the PSS – at rates determined by an actuary to be suffi cient to meet the cost to the Government of the superannuation entitlements of the Corporation’s employees.

1.7 Leases

A distinction is made between fi nance leases and operating leases. Finance leases effectively transfer from the lessor to the lessee substantially all the risks and rewards incidental to ownership of leased non-current assets. An operating lease is a lease that is not a fi nance lease. In operating leases, the lessor effectively retains substantially all such risks and benefi ts.

Where a non-current asset is acquired by means of a fi nance lease, the asset is capitalised at either the fair value of the lease property or, if lower, the present value of minimum lease payments at the inception of the contract and a liability recognised at the same time and for the same amount.

The discount rate used is the interest rate implicit in the lease. Leased assets are amortised over the period of the lease. Lease payments are allocated between the principal component and the interest expense.

Operating lease payments are expensed on a straight line basis which is representative of the pattern of benefi ts derived from the leased assets.

1.8 Borrowing Costs

All borrowing costs are expensed as incurred.

1.9 Cash

Cash means notes and coins held and any deposits held at call with a bank or fi nancial institution. Cash is recognised at its nominal amount.

1.10 Financial Risk Management

The Corporation’s activities expose it to normal commercial fi nancial risk. As a result of the nature of the Corporation’s business and internal and Australian Government policies, dealing with the management of fi nancial risk, the Corporation’s exposure to market, credit, liquidity and cash fl ow and fair value interest rate risk is considered to be low.

1.11 Investments

Investments are initially measured at their fair value.

After initial recognition, fi nancial assets are to be measured at their fair values except for:

• loans and receivables which are measured at amortised cost using the effective interest method,

• held-to-maturity investments which are measured at amortised cost using the effective interest method, and

• investments in equity instruments that do not have a quoted market price in an active market and whose fair value cannot be reliably measured and derivatives that are linked to and must be settled by delivery of such unquoted equity instruments, which shall be measured at cost.

1.12 Derecognition of Financial Assets and Liabilities

Financial assets are derecognised when the contractual rights to the cash fl ows from the fi nancial assets expire or the asset is transferred to another entity. In the case of a transfer to another entity, it is necessary that the risks and rewards of ownership are also transferred.

Financial liabilities are derecognised when the obligation under the contract is discharged or cancelled or expires.


1.13 Impairment of Financial Assets

Financial assets are assessed for impairment at each balance date.

Financial assets held at amortised cost

If there is objective evidence that an impairment loss has been incurred for loans and receivables or held to maturity investments held at amortised cost, the amount of the loss is measured as the difference between the asset’s carrying amount and the present value of estimated future cash fl ows discounted at the asset’s original effective interest rate. The carrying amount is reduced by way of an allowance account. The loss is recognised in the Income Statement.

Financial assets held at cost

If there is objective evidence that an impairment loss has been incurred on an unquoted equity instrument that is not carried at fair value because it cannot be reliably measured, or a derivative asset that is linked to and must be settled by delivery of such an unquoted equity instrument, the amount of the impairment loss is the difference between the carrying amount of the asset and the present value of the estimated future cash fl ows discounted at the current market rate for similar assets.

Available for sale fi nancial assets

If there is objective evidence that an impairment loss on an available for sale fi nancial asset has been incurred, the amount of the difference between its cost, less principal repayments and amortisation, and its current fair value, less any impairment loss previously recognised in expenses, is transferred from equity to the Income Statement.

1.14 Suppliers and Other Payables

Supplier and other payables are recognised at amortised cost. Liabilities are recognised to the extent that the goods or services have been received (and irrespective of having been invoiced).

1.15 Contingent Liabilities and Contingent Assets

Contingent Liabilities and Contingent Assets are not recognised in the Balance Sheet but are reported in the relevant schedules and notes. They may arise from uncertainty as to the existence of a liability or asset, or represent an existing liability or asset in respect of which settlement is not probable or the amount cannot be reliably measured. Contingent assets are reported when settlement is probable, and contingent liabilities are recognised when settlement is greater than remote.

1.16 Acquisition of Assets

Assets are recorded at cost on acquisition except as stated below. The cost of acquisition includes the fair value of assets transferred in exchange and liabilities undertaken. Financial assets are initially measured at their fair value plus transaction costs where appropriate.

1.17 Property, Plant and Equipment

Asset recognition threshold

Purchases of property, plant and equipment are recognised initially at cost in the Balance Sheet, except for purchases costing less than $1,000, which are expensed in the year of acquisition (other than where they form part of a group of similar items which are signifi cant in total).

The initial cost of an asset includes an estimate of the cost of dismantling and removing the item and restoring the site on which it is located. This is particularly relevant to ‘makegood’ provisions in property leases taken up by the Corporation where there exists an obligation to restore the property to its original condition. These costs are included in the value of the Corporation’s leasehold improvements with a corresponding provision for the ‘makegood’ taken up.




Revaluations

Fair values for each class of asset are determined as shown below:

ASSET CLASS FAIR VALUE MEASURED AT:

Leasehold improvements Depreciated replacement cost

Plant and equipment Market selling price

Following initial recognition at cost, property plant and equipment are carried at fair value less accumulated depreciation and accumulated impairment losses. Valuations are conducted with suffi cient frequency to ensure that the carrying amounts of assets do not differ materially with the assets’ fair values as at the reporting date. The regularity of independent valuations depends upon the volatility of movements in market values for the relevant assets.

Revaluation adjustments are made on a class basis. Any revaluation increment is credited to equity under the heading of asset revaluation reserve except to the extent that it reverses a previous revaluation decrement of the same asset class that was previously recognised through surplus and defi cit. Revaluation decrements for a class of assets are recognised directly through surplus and defi cit except to the extent that they reverse a previous revaluation increment for that class.

Any accumulated depreciation as at the revaluation date is eliminated against the gross carrying amount of the asset and the asset restated to the revalued amount.

Depreciation

Depreciable property, plant and equipment assets are written-off to their estimated residual values over their estimated useful lives to the Corporation using, in all cases, the straight-line method of depreciation. Leasehold improvements are depreciated on a straight-line basis over the lesser of the estimated useful life of the improvements or the unexpired period of the lease.

Depreciation rates (useful lives), residual values and methods are reviewed at each reporting date and necessary adjustments are recognised in the current, or current and future reporting periods, as appropriate.

Depreciation rates applying to each class of depreciable asset are based on the following useful lives:

2007 2006

Leasehold improvements Lease term Lease term

Plant and equipment 3 to 7 years 3 to 7 years

Impairment

All assets were assessed for impairment at 30 June 2007. Where indications of impairment exist, the asset’s recoverable amount is estimated and an impairment adjustment made if the asset’s recoverable amount is less than its carrying amount.

The recoverable amount of an asset is the higher of its fair value less costs to sell and its value in use. Value in use is the present value of the future cash fl ows expected to be derived from the asset. Where the future economic benefi t of an asset is not primarily dependent on the asset’s ability to generate future cash fl ows, and the asset would be replaced if the Corporation were deprived of the asset, its value in use is taken to be its depreciated replacement cost.

No indicators of impairment were found for assets at fair value.


1.18 Intangibles

The Corporation’s intangibles comprise purchased and internally developed software for internal use. These assets are carried at cost.

Software is amortised on a straight-line basis over its anticipated useful life. The useful lives of the Corporation’s software is 3 to 5 years (2005–06: 3 to 5 years).

All software assets were assessed for indications of impairment as at 30 June 2007.

1.19 Inventories

Inventories held for sale are valued at the lower of cost and net realisable value.

Inventories not held for resale are valued at cost, unless they are no longer required, in which case they are valued at net realisable value.

1.20 Taxation

The Corporation is exempt from all forms of taxation except fringe benefi ts tax (FBT), goods and services tax (GST) and State taxation.

Revenues, expenses and assets are recognised net of GST:

• except where the amount of GST incurred is not recoverable from the Australian Taxation Offi ce; and

• except for receivables and payables.

1.21 Foreign Currency

Transactions denominated in a foreign currency are converted at the exchange rate at the date of the transaction. Foreign currency receivables and payables are translated at the exchange rates current as at balance date. Associated currency gains and losses are brought to account in the Income Statement. Currency gains and losses are not material.

1.22 Insurance

The Corporation has insured for risks through the Government’s insurable risk managed fund, called Comcover. Workers’ compensation is insured through Comcare Australia.

1.23 Comparative Figures

Comparative fi gures have been adjusted to conform to changes in presentation in these fi nancial statements where required.

2 EVENTS AFTER THE BALANCE SHEET DATEThere has been no event after balance sheet date, with the potential to signifi cantly affect the ongoing structure and fi nancial activities of the Corporation.

3 ECONOMIC DEPENDENCYThe Corporation is controlled by the Government of the Commonwealth of Australia and is dependent upon the following industry based levies to carry out its normal activities.

Wine grape levy

A levy imposed by the Primary Industries (Excise) Act 1999 in respect of any prescribed goods (via fresh grapes, dried grapes and grape juice) used in the manufacture of wine, is collected by the Department of Agriculture, Fisheries & Forestry and the marketing component of the levy is paid to the Australian Wine and Brandy Corporation under the Australian Wine and Brandy Corporation Act, 1980.

Wine export charge

A levy imposed by the Primary Industries (Customs) Charges Act 1999 in respect of the ‘free on board’ value of wine exported, is collected by the Department of Agriculture, Fisheries & Forestry and is paid to the Australian Wine and Brandy Corporation under the Australian Wine and Brandy Corporation Act, 1980.




2007 $’000 2006 $’000

4 INCOME

Revenue4A Sale of goods and rendering of services

Provision of goods – related entities 606 938

Provision of goods – external entities 142 341

Total sale of goods 748 1,279

Rendering of services – related entities 371 73

Rendering of services – external entities 5,487 4,772

Total rendering of services 5,858 4,845

Total sales of goods and rendering of services 6,606 6,124

4B Interest

Deposits 136 156

Total interest revenue 136 156

4C Rental income

Operating lease:

Sub-lease 60 –

Total rental income 60 –

4D Industry contributions

Wine grape levy 3,161 3,208

Wine export charge 3,002 2,905

User pay promotions 748 1,849

Program memberships 2,431 2,325

Total industry contributions 9,342 10,287

4E Other revenue

Export partner sponsorships 225 265

Export market development grant 165 155

Total other revenue 390 420


2007 $’000 2006 $’000

Gains4F Sale of assets

Infrastructure, plant and equipment

Proceeds from sale – 1

Carrying value of assets sold – –

Net gain from sale of assets – 1

4G Foreign exchange

Non-speculative – 39

Total foreign exchange gains – 39

4H Other gains

Reversal of Make Good Provision – 128

5 EXPENSES5A Employees benefi ts

Wages and salaries 4,446 3,940

Superannuation 316 285

Leave and other entitlements 323 254

Separation and redundancies 155 242

Other employee benefi ts 320 276

Total employee benefi ts 5,560 4,997

5B Suppliers

Provision of goods – external entities 615 1,094

Rendering of services – related entities 2,526 3,952

Rendering of services – external entities 6,046 6,149

Operating lease rentals:

Minimum lease payments 903 729

Workers compensation premiums 22 23

Total supplier expenses 10,112 11,947

5C Depreciation and amortisation

Depreciation:

Infrastructure, property, plant and equipment 259 210

Leasehold improvements 108 87

Total depreciation 367 297

Amortisation:

Intangibles:

Computer software 86 85

Total amortisation 86 85

Total depreciation and amortisation 453 382



2007 $’000 2006 $’000

5D Finance costs

Overdrafts 1 –

Total fi nance costs 1 –

5E Write-down and impairment of assets

Revaluation decrements – non-fi nancial assets

Infrastructure, plant and equipment 53 –

Bad and doubtful debt expense – 4

Total write-down and impairment of assets 53 4

5F Foreign exchange losses

Non-speculative 113 –

Total foreign exchange losses 113 –

5G Losses from asset sales

Infrastructure, plant and equipment

Proceeds from sale 2 –

Carrying value of assets sold 5 –

Total losses from asset sales 3 –

6 FINANCIAL ASSETS6A Cash and cash equivalents

Cash on hand and at bank 280 448

Deposits 2,272 1,804

Total cash and cash equivalents 2,552 2,252

6B Trade and other receivables

Goods and services 1,169 1,733

GST receivable from the Australian Taxation Offi ce – 11

Other:

Interest receivable 16 –

Other receivables 930 1,026

Total other receivables 946 1,026

Total trade and other receivables (gross) 2,115 2,770

Less Allowance for doubtful debts:

Goods and services (2) (70)

Total trade and other receivables (net) 2,113 2,700



2007 $’000 2006 $’000

Receivables are aged as follows:

Not overdue 1,688 1,459

Overdue by:

Less than 30 days 288 543

30 to 60 days 109 206

61 to 90 days 6 191

More than 90 days 24 371

Total receivables (gross) 2,115 2,770

The allowance for doubtful debts is aged as follows:

More than 90 days 2 70

Total allowance for doubtful debts 2 70

Receivables are represented by:

Current 2,075 2,700

Non-current 38 –

Total trade and other receivables (net) 2,113 2,700

7 NON FINANCIAL ASSETS7A Land and buildings

Leasehold Improvements

– at fair value 417 540

– accumulated amortisation – (115)

Total leasehold improvements 417 425

Total land and buildings (non-current) 417 425

No indicators of impairment were found for land and buildings

7B Infrastructure, plant and equipment

Plant and equipment

– gross carrying value (at fair value) 417 855

– accumulated depreciation – (364)

Total plant and equipment 417 491

All revaluations are conducted in accordance with the revaluation policy stated at Note 1. In 2006–07, an independent valuation was undertaken by S. O’Leary (Australian Valuation Offi ce)

Revaluation increment of $43 for leasehold improvements (2006: $nil) was credited to the asset revaluation reserve and included in the equity section of the balance sheet.

Revaluation decrement of $53 for plant and equipment (2006: $nil) was shown as an expense in the income statement.

No indicators of impairment were found for infrastructure, plant and equipment.




BUILDINGS – LEASEHOLD

IMPROVEMENTS $’000

OTHER INFRASTRUCTURE,

PLANT & EQUIPMENT $’000

TOTAL $’000

7C Analysis of property, plant and equipment

TABLE A – Reconciliation of the opening and closing balances of property, plant and equipment (2006–07)

As at 1 July 2006

Gross book value 540 855 1,395

Accumulated depreciation/amortisation (115) (364) (479)

Net book value 1 July 2006 425 491 916

Additions:

by purchase 34 243 277

Revaluations and impairments through equity 43 (53) (10)

Depreciation/amortisation expense (108) (259) (367)

Recognition of Make Good provision 23 – 23

Disposals:

by sales – (5) (5)

Net book value 30 June 2007 417 417 834

Net book value as at 30 June 2007 represented by:

Gross book value 417 417 834

Accumulated depreciation/amortisation – – –

417 417 834

TABLE A – Reconciliation of the opening and closing balances of property, plant and equipment (2005–06)

As at 1 July 2005




Additions:

by purchase 21 283 304

Depreciation/amortisation expense (88) (210) (298)

Recognition of Make Good Asset due to extension of property leases 128 – 128





425 491 916


2007 $’000 2006 $’000

7D Intangibles

Computer software at cost:

Software purchased 377 377

Internally developed – in progress 317 47

Internally developed – in use 808 808

Accumulated amortisation (1,080) (993)

Total intangibles (non-current) 422 239

No indicators of impairment were found for intangible assets.

Table B: Reconciliation of the opening and closing balances of intangibles (2006–07)

COMPUTER SOFTWARE INTERNALLY DEVELOPED

$’000

COMPUTER SOFTWARE

PURCHASED $’000

TOTAL $’000

As at 1 July 2006




Additions:

by purchase 269 – 269

Amortisation – (86) (86)



Gross book value 1,124 377 1,501

Accumulated depreciation/amortisation (808) (271) (1,079)

316 106 422

Table C: Reconciliation of the opening and closing balances of intangibles (2005–06)

As at 1 July 2005




Additions:

by purchase 47 – 47

Amortisation (2) (82) (84)





47 192 239




2007 $’000 2006 $’000

7E Inventories

Finished goods held for resale 67 6

Total inventories (current) 67 6

7F Other non-fi nancial assets

Prepayments 39 232

Total other non-fi nancial assets (current) 39 232

No indicators of impairment were found for other non-fi nancial assets

8 PAYABLES8A Suppliers

Trade and other creditors 965 1,785

Operating lease rentals 7 –

Total supplier payables (current) 972 1,785

Trade creditors

Settlement is usually made net 60 days for AWO Scheme suppliers and net 30 days for all other suppliers

8B Other payables

Prepayments received/unearned income 137 144

GST payable to ATO 75 –

Other 91 81

Total other payables (current) 303 225

9 PROVISIONS 9A Employee provisions

Salaries and wages 82 43

Leave 724 653

Superannuation 2 –

Total employee provisions 808 696

Employee provisions are represented by:

Current 682 471

Non-current 126 225

Total employee provisions 808 696


2007 $’000 2006 $’000

9B Other provisions

Restoration obligations 151 128

Total other provisions 151 128

Other provisions are represented by:

Current – –

Non-current 151 128

Total other provisions 151 128

Restoration obligations

Carrying amount 1 July 2006 128

Additional provisions made 33

Unwinding of discounted amount arising from the passage of time (10)

Carrying amount 30 June 2007 151

The Corporation currently has three agreements for the leasing of premises which have provisions requiring the Corporation to restore the premises to their original condition at the conclusion of the leases. The Corporation has made a provision to refl ect the present value of this obligation.

10 CASH FLOW RECONCILIATIONReconciliation of cash and cash equivalents as per Balance Sheet to Cash Flow Statement

Report cash and cash equivalents as per:

Cash Flow Statement 2,552 2,252

Balance Sheet 2,552 2,252

Difference – –

Reconciliation of operating result to net cash from operating activities:

Operating result 239 (175)

Depreciation/amortisation 453 382

Net write down of non-fi nancial assets 53 –

Revenue recognised resulting from reversal of make good provision – (128)

(Gain)/Loss on disposal of assets 3 (1)

Changes in assets and liabilities

(Increase)/decrease in receivables 587 (603)

(Increase)/decrease in inventories (61) 27

(Increase)/decrease in other non fi nancial assets 193 (65)

Increase/(decrease) in supplier payables (813) (95)

Increase/(decrease) in other payables 78 –

Increase/(decrease) in employee provisions 112 38

Net cash from (used by) operating activities 844 (620)



2007 $’000 2006 $’000

11 CONTINGENT LIABILITIES AND ASSETSContingent liabilities

Other guarantees1 45 45

Total contingent liabilities 45 45

1 The Corporation has a bank guarantee to cover credit facilities on the United Kingdom credit cards and a bank guarantee to cover rental premises in the Netherlands.

Unquantifi able contingenciesAn appeal has been made to the Federal Court of Australia against the Administrative Appeals Tribunal’s determination on the King Valley region. The Appellant has sought to have the AAT’s decision set aside in favour of their application and that the Geographical Indications or other parties to the dispute pay the Appellant’s costs. The Court has heard this matter, but has not yet published a decision, hence it is not possible to quantify either the potential for an unfavourable decision on costs or their quantum.

12 REMUNERATION OF MEMBERSThe number of members of the Corporation included in in these fi gures are shown below in the relevant remuneration bands:

NIL – $14,999 1* 1*

$15,000 – $29,999 6 6

$30,000 – $44,999 1 1

Total number of members of the Corporation 8 8

*includes the Government representative who did not receive any fees.

Total remuneration received or due and receivable by members of the Corporation 192 185

Member remuneration is determined by the Remuneration Tribunal.

Member related entities pay levies imposed by the Primary Industries (Excise) Act 1999 and the Primary Industries (Customs) Charges 1999 Act as well as charges for processing export documentation and inspection charges. These levies and charges are on the same terms and conditions as apply to all other levy payers and exporters.

13 RELATED PARTY DISCLOSURESThe members of the Australian Wine and Brandy Corporation during the year were:

J C Moore AO – Chairperson L P Deans M De Palma C Dunn G C Gorrie – Government Representative A Kennedy A MooreM S Purbrick

The aggregate remuneration is disclosed in Note 12.



2007 2006

14 REMUNERATION OF EXECUTIVESThe number of offi cers who received or were due to receive total remuneration of $130,000 or more:

$130,000 – $144,999 4 3

$145,000 – $159,999 2 2

$160,000 – $174,999 1 1

$175,000 – $189,999 2 –

$190,000 – $204,999 1 –

$265,000 – $289,999 – 2

$320,000 – $334,999 1 –

Total 11 8

2007 $’000 2006 $’000

The aggregate amount of total remuneration of executives shown above. 1,934 1,458

The aggregate amount of separation and redundancy/termination benefi t payments during the year to executives shown above. 101 176

15 REMUNERATION OF AUDITORSRemuneration to the Auditor-General for auditing the fi nancial statements for the reporting period. 19 15

No other services were provided by the Auditor-General.

2007 2006

16 AVERAGE STAFFING LEVELSThe average staffi ng levels for the corporation during the year were: 60.3 57.7


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2007 2006

NOTE

TOTAL CARRYING AMOUNT

$’000AGGREGATE FAIR

VALUE $’000

TOTAL CARRYING AMOUNT

$’000AGGREGATE FAIR

VALUE $’000

17B Fair Values of Financial Assets and Liabilities

Financial Assets

Cash at bank 6A 280 280 448 448

Deposits at call 6A 2,272 2,272 1,804 1,804

Receivables for goods and services 6B 1,169 1,167 1,733 1,663

Interest receivable 6B 16 16 – –

GST receivable 6B – – 11 11

Other receivables 6B 930 930 1,026 1,026

Total fi nancial assets 4,667 4,665 5,022 4,952

Financial Liabilities (Recognised)

Trade creditors 8A 972 972 1,785 1,785

Other payables 8B 303 303 225 225

Total fi nancial liabilities (Recognised) 1,275 1,275 2,010 2,010

Financial Liabilities (Unrecognised)

Other guarantees and indemnities 11 45 45 45 45

Total fi nancial liabilities (Unrecognised) 45 45 45 45

17C Credit Risk Exposure

The Corporation’s maximum exposure to credit risk at reporting date in relation to each class of recognised fi nancial asset is the carrying amount of those assets as indicated in the Balance Sheet

The Corporation has no signifi cant exposures to any concentrations of credit risk.




2007 $’000 2006 $’000

18 COMPENSATION AND DEBT RELIEFPayments made to the corporation during the reporting period – –

19 REPORTING BY OUTCOMES

19A Outcomes of the Corporation

The Australian Wine and Brandy Corporation is structured to meet one outcome: To enhance the operating environment for the benefi t of the Australian wine industry.

19B Net cost of outcome delivery

Total expenses (Departmental) 16,295 17,330

Total costs recovered (Departmental) 16,534 17,155

Total other external revenues (Departmental)

Net cost/(contribution) of outcome 239 (175)


APPENDICESCONTENTSCorporate Directory 82

Wine Industry Statistics 86

Glossary of Terms & Acronyms 105

Compliance Index 106

Alphabetical Index 107


CORPORATE DIRECTORY

Members of the Corporation

Chairman Hon John MOORE AO

Deputy Chairman Angus KENNEDY

Members Leon DEANS

Michael DE PALMA

Caroline DUNN

Andrew MOORE

Mark PURBRICK

Staff

Corporate Services

Chief Executive Sam TOLLEY

Corporation Secretary/Executive Offi cer GIC Jock OSBORNE

Chief Financial Offi cer Ernie SULLIVAN

Executive Assistant Kate PALMROSE

Finance

Accountant Andrew COXON

Finance Offi cer – Accounts Payable Sarah TURNER

Finance Offi cer – Accounts Receivable Michael KELLY

Systems and IT

Senior Systems Developer Nathan JANES

Senior Systems Offi cer Kym BERGER

E-Systems Engineer and Administrator Nicholas JAMES

Systems Administrator Sheree ARTHUR

WEA Gen 111 Project Document Writer (Part time) Jacqui NORMAN

Administration Services

Senior Administration Offi cer Kris FORBES

Administration/Records Offi cer Sharon WOOD

Administration Offi cer Katrina BROAD

Administration Offi cer – Reception Alex SILK

Market Development

General Manager Market Development Paul HENRY

Manager – Marketing & Communications Lucy ANDERSON

Regional Manager – Emerging Markets Ali HOGARTH

Executive Offi cer – Communications James MARCH

Executive Assistant Leeanne CALDECOTT

Marketing Offi cer – International Visits Prue IRISH

Marketing Offi cer – International Stacey HILL

Marketing Offi cer – Domestic Belinda HAMLYN

Marketing Offi cer – Program Membership (Part time) Anna HARVEY

Customer Relations Offi cer Julie MOUNT

Knowledge Development

Manager Information and Analysis Lawrie STANFORD

Senior Analyst Peter BAILEY

Survey Co-ordinator Peter CARMALT

Analyst Rodney CARGIN

Compliance and Trade

General Manager Compliance and Trade Stephen GUY

Trade Manager Andreas CLARK

Manager – Export Compliance Jessica PATER

Compliance Auditor Brian DALBY

Technical Auditor David BOWLEY

Senior Wine Inspector (Part time) Mark TUMMEL

Compliance Offi cers

Kate GOODFELLOW

Brooke HIGGINS

Linda HUNTER

Sally JERICHO

Jessica NAVIDAD

Skye SARGENT

Kimberley SCHILLER

Sonia WATERMAN

Melanie CLARKE-SORGINI (Part-time)

APPENDIX 1


Compliance and Trade (continued)

Wine Inspectors (casual – as required)

Ric ANDERSON

Vicki ARNOLD

Susanne BELL

Warrick BILLINGS

Aaron BRASHER

Aldo BRATOVIC

Zar BROOKS

Ed CARR

Steve CLARKE

Samantha CONNEW

Stephen COUCHE

Christa DEANS

Nigel DOLAN

Peter DREDGE

John DUVAL

Adam EGGINS

Mike FARMILO

Diana GENDERS

Colin GLAETZER

James GODFREY

Steve GRIMLEY

Charles HARGRAVES

Chris HATCHER

Sheryl HENRIKS

Bernard HICKIN

Alan HOEY

Ian HONGELL

Tony INGLE

Tim JAMES

Neil JERICHO

Jon KETLEY

Sam KURTZ

Peter LESKE

Andrew LOCKE

Adrian LOCKHART

David MAVOR

Sally McGILL

Hylton McLEAN

Brian MILLER

Robin MOODY

David O’LEARY

Simon PARKER

Jane PAULL

Corrina RAYMENT

David RIDGE

Louisa ROSE

Tony ROYAL

Robert RUEDIGER

Mark SWANN

Michael SYKES

Kerri THOMPSON

Shelly THOMPSON

Chris TOLLEY

Nick WALKER

Warren WARD

Andrew WATERMAN

Andrew WIGAN

Kym WILSDON

Don YOUNG

Head Offi ce

National Wine Centre – Industry House

Corner Hackney and Botanic Roads

Adelaide SA 5000

Telephone: (08) 8228 2000

Facsimile: (08) 8228 2022

Email: [email protected]

Website: www.wineaustralia.com

Compliance Centre

Level 2, 18 Dequetteville Terrace

Kent Town SA 5071

Telephone: (08) 8228 2000

Facsimile: (08) 8228 2066

Email: [email protected]

Postal Address (both locations)

PO Box 2733, Kent Town, SA 5071


APPENDIX 1United Kingdom

Regional Manager UK Kirsten MOORE

Marketing and Communications Manager Melissa WORTHINGTON

Events and Visits Co-ordinator Elizabeth WATERHOUSE

Offi ce Administrator Jennifer ALLPORT

The Australia Centre

Strand, London WC2B 4LG

UNITED KINGDOM

Telephone: +44 207 887 5259

Facsimile: +44 207 240 9429

E-mail: [email protected]

Website: www.wineaustralia.com/uk

Ireland

Regional Manager Ireland John McDONNELL

Ballyvaughan, Co Clare

IRELAND

Telephone: +353 65 707 7264

Facsimile: +353 65 707 7264


Website: www.wineaustralia.com/ireland

Continental Europe

Regional Manager Continental Europe Marco TIGGELMAN

Marketing Executives Tim LOCKWOOD

Sacha OERLEMANS

Shelly MURPHY

Marketing Co-ordinator Petra DE VRIES

Smidswater 27

NL-2514 BW Den Haag

THE NETHERLANDS

Telephone: +31 70 346 4222

Facsimile: +31 70 345 3364


Website: www.wineaustralia.com/europe

Japan

Regional Manager Japan Ben HOLT

Administrative Assistant Yuka OTSU

4th Floor, Rune Yotsuya Building

2-4-1 Yotsuya Shinjuku-ku, Tokyo, 160-0004

JAPAN

Telephone: +81 3 5367 3301

Facsimile: +81 3 5367 3303


Website: www.wineaustralia.com/japan


United States of America

(By arrangement with Austrade)

Regional Director USA Jan STUEBING-SMYTH

Events Manager Kate McCLURE

Public Relations Manager Francine BRYAN-BROWN

Marketing Assistant/Intern Tim IRWIN

34th Floor, 150 East 42nd Street

New York NY 10017

USA

Telephone: +1 212 351 6585

Facsimile: +1 212 867 7710


Website: www.wineaustralia.com/usa

Canada

(By arrangement with Austrade)

Toronto Offi ce

Regional Director Canada Monica RALPHS

Marketing and Events Manager Marnie WILLIAMSON

Suite 1100 South Tower, 175 Bloor Street East

Toronto, Ontario, M4W 3R8

CANADA

Telephone: +1 416 323 1893

Facsimile: +1 416 323 3910


Website: www.wineaustralia.com/canada

Vancouver Offi ce

Marketing and Events Manager Shelley HAMER-JACKSON

Suite 1225, 888 Dunsmuir Street

Vancouver, British Columbia, V6C 3K4

CANADA

Telephone: +1 604 694 6171

Facsimile: +1 604 684 1856


Website: www.wineaustralia.com/canada


APPENDIX 2WINE INDUSTRY STATISTICS

Index Page

KEY STATISTICS 87

AUSTRALIAN VITICULTURE Areas of Vines and Grape Production by Variety 88

Winegrape Production 89

AUSTRALIAN WINE AND BRANDY PRODUCTIONGrape Crush 90

Gross Wine Production 91

Beverage Wine Production 92

Brandy and all Other Grape Spirit Production 93

AUSTRALIAN WINE SALESDomestic Sales of Australian Wine by Type 94

Domestic Sales of Australian Still Wine by Type and Container 95

Domestic Sales of Brandy 96

AUSTRALIAN WINE CONSUMPTIONApparent per Capita Consumption of Alcoholic Beverages 97

TRADEAustralian Wine Export Approvals – by Country, Volume and Value 98

Australian Wine Export Approvals – by Major Destination – Litres 99

Australian Wine Export Approvals – by Major Destination – A$ FOB 99

Brandy Imports Cleared for Entry 100

Wine Imports Cleared for Entry 101

INTERNATIONAL World Wine Trade by Volume and Value 102

World Wine Trade by Container 103

Per Capita Consumption 104


KEY STATISTICS

UNITS OF MEASUREMENT 2003–04 2004–05 2005–06 2006–07

Vintage

Vintage crush (a) tonnes 1 917 238 1 925 490 1 901 560 1 420 000 (b)

Wine production (includes distillation wine) (a) ’000 litres 1 471 228 1 433 827 1 429 788 na

Brandy and all other grape spirit production (c) ’000 litres of alcohol 9 747 10 079 8 181 na

Trade

Domestic sales of Australian wine (d) ’000 litres 417 378 430 131 432 366 449 174

Domestic sales of Australian brandy (d) ’000 litres of alcohol 618 576 535 510

Australian wine export approvals (e) ’000 litres 580 740 660 834 735 718 797 698

Australian wine export approvals (e) A$’000 2 544 970 2 748 204 2 799 343 2 992 295

Wine imports (f) ’000 litres 18 664 22 142 27 149 34 327

Wine imports (f) A$’000 152 375 188 222 234 357 306 917

Data for prior years includes revisions

na Not available at time of publication

Sources:

(a) ABS Cat. No. 1329.0(b) WFA Vintage Survey estimate(c) ABS personal communication(d) ABS Cat. No. 8504.0, 1329.0(e) AWBC Export Approval Database(f) ABS Special Report (Clearances)


AREAS OF VINES AND GRAPE PRODUCTION BY VARIETY – 2005–06

AREA OF VINES AT HARVEST USE OF GRAPES

BEARING NOT YET

BEARING DRYING (a)TABLE AND

OTHER WINEGRAPES

HA HA TONNES TONNES TONNES

Red GrapesShiraz 39 087 2 028 52 85 422 430Cabernet Sauvignon 27 639 464 44 22 274 305Merlot 10 032 561 123 085Pinot Noir 4 039 215 13 33 921Ruby Cabernet 1 433 36 26 382Grenache 2 001 24 56 22 697Petit Verdot 1 409 47 26 228Mataro 842 33 40 10 882Sangiovese 406 20 13 4 716Durif 329 73 4 442Other Red 6 752 643 10 340 35 430 31 124Total Red Grapes 93 968 4 144 10 448 35 645 980 212White GrapesChardonnay 28 240 2 979 1 119 397 322Semillon 5 874 362 106 43 96 786Colombard 2 655 112 74 827Muscat Gordo Blanco 2 232 202 3 896 210 50 320Riesling 4 092 307 52 38 329Sauvignon Blanc 3 875 787 1 12 40 501Sultana 6 446 164 92 968 16 527 14 516Verdelho 1 634 63 1 19 857Chenin Blanc 686 24 1 11 497Traminer 730 51 7 11 051Viognier 743 283 4 6 710Trebbiano 312 3 4 399Pinot Gris 659 693 5 778Muscat a Petits Grains Blanc 150 47 2 1 715Crouchen 104 1 1 994Marsanne 186 10 1 731Doradillo 105 1 854Other White 5 477 392 10 349 29 140 22 275Total White Grapes 64 200 6 480 107 372 46 065 801 462Total Grapes 158 168 10 624 117 821 81 710 1 781 674

Note: May not total due to rounding(a) Fresh weight Source: ABS Vineyard Survey

APPENDIX 2


WINEGRAPE PRODUCTION (Tonnes)

SA NSW VIC WA TAS QLDAUSTRALIA

(a)

1999–00

Red grapes 286 496 115 797 112 522 16 741 1 388 1 125 534 122

White grapes 191 859 172 157 189 387 20 806 1 978 794 577 015

Total grapes 478 355 287 954 301 908 37 547 3 367 1 919 1 111 137

2000–01

Red grapes 445 112 146 749 144 120 33 056 2 298 1 378 772 785

White grapes 224 887 173 753 186 582 29 323 2 676 1 026 618 290

Total grapes 669 999 320 502 330 702 62 378 4 974 2 404 1 391 074

2001–02

Red grapes 451 343 199 995 155 855 36 524 1 376 2 517 847 730

White grapes 238 300 215 032 182 681 27 036 1 770 1 847 666 771

Total grapes 689 643 415 026 338 536 63 559 3 147 4 363 1 514 501

2002–03

Red grapes 408 669 184 229 138 572 35 523 3 373 2 002 772 524

White grapes 203 428 178 298 143 869 27 161 3 018 1 208 557 076

Total grapes 612 097 362 527 282 440 62 684 6 390 3 211 1 329 600

2003–04

Red grapes 597 107 227 301 183 704 47 468 4 275 2 927 1 063 075

White grapes 282 968 223 215 201 192 40 055 3 586 2 235 753 482

Total grapes 880 075 450 516 384 896 87 523 7 861 5 162 1 816 556

2004–05

Red grapes 545 182 227 680 188 331 41 579 2 921 3 988 1 009 983

White grapes 310 856 248 294 204 632 38 369 3 215 2 701 808 443

Total grapes 856 038 475 974 392 963 79 948 6 136 6 689 1 818 426

2005–06

Red grapes 555 719 221 637 169 496 27 046 2 831 3 116 980 212

White grapes 325 628 251 945 185 302 33 795 2 740 1 648 801 462

Total grapes 881 348 473 582 354 797 60 841 5 571 4 764 1 781 674

(a) Includes Australian Capital Territory and Northern Territory Note: May not total due to roundingSource: ABS Vineyard Survey


APPENDIX 2GRAPE CRUSH (‘000 Tonnes)

VINTAGE SANSW/

ACT VIC WAOTHER

STATES AUSTRALIA

1971 204 52 na na 38 2941972 232 79 na na 46 3571973 220 74 na na 33 3271974 203 80 na na 61 3441975 273 86 na na 74 4331976 256 89 na na 76 4211977 270 105 na na 83 4581978 263 99 na na 70 4321979 273 121 na na 83 4771980 292 123 na na 96 5111981 286 124 na na 79 4891982 316 106 na na 77 4991983 243 113 na na 85 4401984 284 123 na na 112 5191985 327 151 na na 120 5981986 278 148 na na 94 5201987 270 151 na na 90 5121988 235 157 na na 94 4851989 301 183 na na 142 6251990 321 172 100 9 1 6031991 276 169 86 7 1 5391992 323 199 102 10 1 6361993 287 230 98 10 1 6261994 390 239 134 14 1 7771995 320 187 109 12 2 6301996 432 282 149 18 2 8831997 389 265 125 18 2 7981998 485 308 308 22 3 9761999 516 385 190 32 4 1 1262000 511 397 197 36 4 1 1452001 716 430 217 56 6 1 4242002 747 557 235 63 4 1 6062003 647 475 211 60 6 1 3992004 921 623 283 82 8 1 9172005 911 645 285 77 7 1 9262006 913 657 258 66 8 1 9022007e na na na na na 1 420

From 1990, data collected from winemakers crushing 50 tonnes or more, prior to 1990 – 400 tonnes or moree WFA estimatena Not available or recorded in ‘Other States’Note: May not total due to roundingSource: ABS Cat No 1329.0


GROSS WINE PRODUCTION (‘000 Litres)

SA NSW(a) VIC WA OTHER

STATES AUSTRALIA

1970–71 169 266 46 408 30 078 na 4 532 250 284

1971–72 181 904 66 543 35 835 na 4 537 288 819

1972–73 176 514 59 637 25 840 na 4 209 266 200

1973–74 167 611 76 541 46 070 na 4 444 294 666

1974–75 227 861 74 314 54 278 na 4 724 361 177

1975–76 219 577 73 774 58 310 na 4 584 356 245

1976–77 236 090 78 555 65 650 na 2 753 383 058

1977–78 207 137 72 759 57 564 na 2 117 339 277

1978–79 207 114 81 124 na na na 335 092

1979–80 239 239 97 009 na na na 414 237

1980–81 224 540 91 993 na na 57 740 374 273

1981–82 273 711 74 340 na na 54 601 402 653

1982–83 203 160 75 663 na na 61 253 340 076

1983–84 234 499 85 167 na na 76 578 396 244

1984–85 262 927 107 368 na na 80 196 451 211

1985–86 223 548 115 261 na na 50 471 389 190

1986–87 226 323 113 252 na na 61 484 401 060

1987–88 212 486 122 900 na na 72 386 407 772

1988–89 262 180 136 888 na na 100 865 499 933

1989–90 247 522 122 579 69 996 na 4 487 444 584

1990–91 203 179 122 741 71 520 na 2 469 399 909

1991–92 235 851 152 315 88 450 na 4 155 480 771

1992–93 207 214 173 746 76 998 na 3 878 461 836

1993–94 301 107 168 082 111 538 na 6 650 587 377

1994–95 264 947 139 604 90 865 6 648 732 502 796

1995–96 333 836 207 559 121 655 9 583 812 673 445

1996–97 306 772 193 746 105 912 10 617 332 617 379

1997–98 383 589 220 386 123 823 12 722 1 027 741 547

1998–99 408 319 278 138 278 138 20 173 989 851 143

1999–00 400 777 295 849 139 267 22 200 1 074 859 166

2000–01 552 081 323 360 161 899 37 178 2 019 1 076 538

2001–02 588 697 411 829 179 043 39 118 1 686 1 220 372

2002–03 541 607 348 320 155 471 38 032 2 555 1 085 985

2003–04 733 683 456 976 221 589 55 768 3 211 1 471 228

2004–05 697 449 464 720 218 511 50 503 2 643 1 433 827

2005–06 724 160 481 745 177 053 43 124 3 707 1 429 788

Includes fortifi ed wines made from unfortifi ed wine of the same vintage, unfortifi ed wine, distillation wine for manufacturing brandy and grape spirit and wine obtained from marc

(a) From 2001–02 includes the Australian Capital Territoryna Not available, recorded in ‘Other States’ and/or ‘Australia’Note: May not total due to rounding.Source: ABS Cat. Nos. 8366.0, 1329.0


APPENDIX 2BEVERAGE WINE PRODUCTION (‘000 Litres)

UNFORTIFIED WINE (a)

FORTIFIED (b) TOTALRED WHITETOTAL

UNFORTIFIED

1970–71 na na 83 071 50 379 133 4501971–72 na na 94 385 59 921 154 3061972–73 na na 117 381 54 328 171 7091973–74 na na 136 001 47 954 183 9551974–75 na na 166 817 68 484 235 3011975–76 na na 163 655 68 137 231 7921976–77 na na 190 096 62 471 252 5671977–78 na na 183 605 42 672 226 2771978–79 na na 216 481 58 041 274 5221979–80 na na 266 753 54 746 321 4991980–81 na na 237 786 45 659 283 4441981–82 na na 251 133 51 907 303 0401982–83 na na 238 129 33 541 271 6701983–84 na na 237 124 21 279 258 4031984–85 na na 337 127 43 893 381 0201985–86 na na 294 686 41 692 336 3771986–87 na na 306 804 31 766 338 5701987–88 na na 322 993 31 403 354 3961988–89 na na 399 203 36 937 436 1401989–90 na na 349 913 32 904 382 8171990–91 na na 312 024 33 817 345 8411991–92 na na 390 857 30 776 421 6331992–93 na na 392 575 22 264 414 8391993–94 na na 500 076 30 458 530 5341994–95 na na 433 005 25 399 458 4041995–96 na na 577 272 28 874 606 1461996–97 na na 538 123 28 656 566 7791997–98 na na 651 291 28 947 680 2391998–99 na na 771 957 21 433 793 3891999–00 na na 779 149 27 222 806 3712000–01 na na 1 016 306 18 460 1 034 7662001–02 666 100 484 754 1 150 854 23 247 1 174 1012002–03 599 098 420 295 1 019 393 18 170 1 037 5622003–04 808 963 572 101 1 381 064 20 025 1 401 0892004–05 760 721 639 352 1 400 074 20 275 1 420 3482005–06 776 027 621 727 1 397 754 12 729 1 410 483

(a) Includes sparkling wine(b) Production from unfortifi ed wine made in the specifi ed vintage yearna Not availableNote: May not total due to rounding.Source: ABS Cat, Nos. 8366.0, 1329.0


BRANDY AND ALL OTHER GRAPE SPIRIT PRODUCTION (‘000 Litres of Alcohol)

BRANDYALL OTHER

GRAPE SPIRITS

BRANDY AND ALL

OTHER GRAPE SPIRITS

1970–71 3 848 11 769 15 617

1971–72 4 484 12 348 16 832

1972–73 3 589 9 419 13 008

1973–74 2 152 9 467 11 619

1974–75 1 784 13 572 15 356

1975–76 1 613 13 803 15 416

1976–77 2 127 14 750 16 877

1977–78 2 570 12 065 14 635

1978–79 2 208 9 887 12 095

1979–80 1 650 10 301 11 951

1980–81 2 330 10 814 13 144

1981–82 2 527 10 203 12 730

1982–83 1 387 7 881 9 268

1983–84 1 553 4 505 6 058

1984–85 2 103 7 971 10 074

1985–86 1 255 8 258 9 513

1986–87 1 453 6 646 8 099

1987–88 939 5 717 6 656

1988–89 856 7 614 8 470

1989–90 1 062 6 990 8 052

1990–91 1 333 6 710 8 043

1991–92 1 067 6 344 7 411

1992–93 1 216 4 602 5 818

1993–94 1 463 6 169 7 632

1994–95 1 036 4 860 5 896

1995–96 1 079 7 842 8 921

1996–97 816 5 659 6 475

1997–98 na na 6 258

1998–99 na na 6 230

1999–00 na na 6 782

2000–01 na na 5 096

2001–02 na na 7 148

2002–03 na na 9 632

2003–04 na na 9 747

2004–05 na na 10 079

2005–06 317 7 864 8 181

na Not available for publicationSource: ABS Cat. No.1329.0, personal communication


APPENDIX 2DOMESTIC SALES OF AUSTRALIAN WINE BY TYPE (‘000 Litres)

RED STILL WINE

WHITE STILL WINE

SUB TOTAL SPARKLING SHERRY DESSERT (a)

OTHER WINE (b)

TOTAL ALL

WINE

1987–88 51 613 204 182 255 795 32 643 15 567 19 490 7 048 330 543

1988–89 51 079 186 655 237 734 31 624 14 475 18 811 6 483 309 127

1989–90 49 523 180 433 229 956 31 201 13 908 19 188 6 355 300 608

1990–91 52 123 176 209 228 332 29 463 13 046 17 698 7 733 296 272

1991–92 56 512 190 192 246 704 30 153 12 392 17 499 8 082 314 830

1992–93 59 903 186 405 246 308 29 969 10 989 16 925 7 892 312 083

1993–94 62 248 192 455 254 703 30 599 10 340 16 687 7 210 319 539

1994–95 65 427 186 161 251 588 28 002 10 111 16 889 6 771 313 361

1995–96 68 570 178 710 247 280 30 149 9 668 16 197 6 168 309 462

1996–97 83 734 185 029 268 763 32 552 9 012 16 616 6 641 333 584

1997–98 88 909 189 509 278 418 31 069 8 360 16 214 4 749 338 810

Change in series

RED STILL WINE

WHITE STILL WINE

SUB TOTAL SPARKLING

FORTIFIED BOTTLED (c)

FORTIFIED SOFT PACK

FORTIFIED OTHER (d)

OTHER WINE (b)

TOTAL ALL

WINE

1998–99 99 088 188 308 287 396 32 617 8 482 7 906 7 532 4 412 348 345

1999–00 114 053 193 040 307 093 32 572 7 898 7 796 7 293 6 620 369 272

2000–01 125 561 199 764 325 325 30 658 7 354 8 160 6 674 6 675 384 846

2001–02 130 401 199 881 330 282 29 686 6 487 8 369 5 529 5 879 386 232

2002–03 142 835 201 631 344 466 31 618 6 622 8 856 5 368 5 549 402 479

2003–04 147 074 207 962 355 036 34 676 6 714 9 042 5 447 6 463 417 378

2004–05 155 491 209 348 364 839 38 398 6 179 8 931 4 825 6 959 430 131

2005–06 154 237 212 558 366 795 39 787 5 902 8 279 4 325 7 278 432 366

2006–07 162 910 218 786 381 696 42 760 5 555 7 865 3 971 7 327 449 174

Note: May not total due to rounding. These numbers represent sales by wineries that account for about 97% of total wine sales and exclude sales for ship and aircraft stores, sales of imported wine, exports and inter-winery sales. Includes revisions.

(a) Port, muscat, madeira, tokay and white port.(b) Includes carbonated, vermouth, wine cocktails, marsala, apertif and tonic wines. From July 2000 includes de-alcoholised wine and low and reduced alcohol wines. (c) In glass containers less than 2 litres. Includes muscat, madeira, tokay, sherry and port. (d) Includes tankers, cans and rigid containers including glass 2 litres and over Source: ABS Cat No 8504.0


DOMESTIC SALES OF AUSTRALIAN STILL WINE BY TYPE AND CONTAINER (‘000 Litres)GLASS (a) SOFT PACK (b) OTHER CONTAINERS (c) TOTAL

VOLUME % VOLUME % VOLUME % VOLUME %

White 1991–92 43 461 22.9 138 131 72.6 8 600 4.5 190 192 1001992–93 44 099 23.7 135 911 72.9 6 395 3.4 186 405 1001993–94 48 136 25.0 137 762 71.6 6 557 3.4 192 455 1001994–95 51 856 27.9 129 323 69.5 4 982 2.7 186 161 1001995–96 50 588 28.3 124 357 69.6 3 765 2.1 178 710 1001996–97 55 212 29.8 126 492 68.4 3 325 1.8 185 029 1001997–98 59 352 31.3 125 269 66.1 4 888 2.6 189 509 1001998–99 63 354 33.6 117 954 62.6 7 000 3.7 188 308 1001999–00 69 371 35.9 118 409 61.3 5 260 2.7 193 040 1002000–01 74 123 37.1 122 452 61.3 3 189 1.6 199 764 1002001–02 75 657 37.9 122 776 61.4 1 447 0.7 199 880 1002002–03 81 678 40.5 118 893 59.0 1 060 0.5 201 631 1002003–04 84 225 40.5 120 935 58.2 2 802 1.3 207 962 1002004–05 89 477 42.7 118 803 56.7 1 068 0.5 209 348 1002005–06 92 951 43.6 118 220 55.8 1 387 0.7 212 558 1002006–07 100 609 46.0 116 198 53.1 1 979 0.9 218 786 100

Red 1991–92 24 811 43.9 29 992 53.1 1 709 3.0 56 512 1001992–93 25 884 43.2 32 775 54.7 1 244 2.1 59 903 1001993–94 28 155 45.2 32 579 52.3 1 514 2.4 62 248 1001994–95 30 581 46.7 33 545 51.3 1 301 2.0 65 427 1001995–96 33 705 49.2 34 020 49.6 845 1.2 68 570 1001996–97 41 144 49.1 41 574 49.7 1 016 1.2 83 734 1001997–98 46 746 52.6 41 295 46.4 868 1.0 88 909 1001998–99 53 713 54.2 44 564 45.0 811 0.8 99 088 1001999–00 63 469 55.6 49 806 43.7 778 0.7 114 053 1002000–01 70 506 56.2 53 538 42.6 1 517 1.2 125 561 1002001–02 73 622 56.5 56 085 43.0 695 0.5 130 402 1002002–03 79 752 55.8 62 788 44.0 295 0.2 142 835 1002003–04 82 832 56.3 62 795 42.7 1 447 1.0 147 074 1002004–05 91 146 58.6 63 032 40.5 1 313 0.8 155 491 1002005–06 91 821 59.3 61 116 39.8 1 300 0.8 154 237 1002006–07 102 927 63.2 57 278 35.2 2 705 1.7 162 910 100

Total 1991–92 68 272 27.7 168 123 68.1 10 309 4.2 246 704 1001992–93 69 983 28.4 168 686 68.5 7 639 3.1 246 308 1001993–94 76 291 30.0 170 341 66.9 8 071 3.2 254 703 1001994–95 82 437 32.8 162 868 64.7 6 283 2.5 251 588 1001995–96 84 293 34.1 158 377 64.0 4 610 1.9 247 280 1001996–97 96 356 35.9 168 066 62.5 4 341 1.6 268 763 1001997–98 106 098 38.1 166 564 59.8 5 756 2.1 278 418 1001998–99 117 067 40.7 162 518 56.5 7 811 2.7 287 396 1001999–00 132 840 43.3 168 215 54.8 6 038 2.0 307 093 1002000–01 144 629 44.5 175 990 54.1 4 706 1.4 325 325 1002001–02 149 279 45.2 178 861 54.2 2 142 0.6 330 282 1002002–03 161 430 46.9 181 681 52.7 1 354 0.4 344 465 1002003–04 167 057 47.1 183 730 51.7 4 250 1.2 355 037 1002004–05 180 623 49.5 181 835 49.8 2 378 0.7 364 836 1002005–06 184 772 50.4 179 336 48.9 2 687 0.7 366 795 1002006–07 203 536 53.3 173 476 45.4 4 684 1.2 381 696 100

(a) Break in series in 1998–99 – prior to 1998-99 bottled < 1 litre, from 1998–99 bottled < 2 litre. (b) Includes all collapsible packs, plastic or otherwise. (c) Includes tankers, cans, rigid containers and glass 2 litres and over (plastic, steel, wood and, prior to 1998-99, glass over 1 litre)Note: May not total due to rounding. Includes revisions. Source: ABS Cat. 8504.0


APPENDIX 2DOMESTIC SALES OF BRANDY (‘000 Litres of Alcohol)

AUSTRALIAN BRANDY (a) IMPORTS (b) TOTAL

VOLUME % VOLUME % VOLUME %

1989–90 1 613 67% 793 33% 2 406 100%

1990–91 1 444 69% 636 31% 2 080 100%

1991–92 1 380 68% 662 32% 2 042 100%

1992–93 1 312 68% 629 32% 1 941 100%

1993–94 1 301 67% 634 33% 1 935 100%

1994–95 1 188 67% 590 33% 1 778 100%

1995–96 1 113 66% 583 34% 1 696 100%

1996–97 987 61% 628 39% 1 615 100%

1997–98 974 60% 661 40% 1 635 100%

1998–99 905 60% 598 40% 1 503 100%

1999–00 837 59% 577 41% 1 414 100%

2000–01 901 64% 504 36% 1 405 100%

2001–02 701 55% 577 45% 1 278 100%

2002–03 651 54% 557 46% 1 208 100%

2003–04 618 53% 540 47% 1 158 100%

2004–05 576 53% 519 47% 1 095 100%

2005–06 535 52% 494 48% 1 029 100%

2006–07 510 53% 447 47% 957 100%

(a) Quantities on which excise duty was paid (b) Imports cleared for home consumption and goods cleared from Customs warehouses. Source: ABS special report, Cat No 8504.0


APPARENT PER CAPITA CONSUMPTION OF ALCOHOLIC BEVERAGES

BEER WINE SPIRITS

LITRES LITRES L AL

1996–97 121.4 24.1 1.7

1997–98 119.9 25.0 1.8

1998–99 118.3 25.2 1.8

1999–00 116.8 26.0 1.7

2000–01 116.9 26.2 1.8

2001–02 113.4 26.0 1.9

2002–03 114.6 26.8 2.0

2003–04 110.0 27.5 2.1

2004–05 107.7 28.1 2.1

2005–06 107.2 28.0 2.2

L al. Litres of alcoholna not available Source: ABS cat. 4307.0.55.001, Apparent Consumption of Alcohol Data refers to apparent per person consumption of these products by persons aged 15 years and over.


APPENDIX 2AUSTRALIAN WINE EXPORT APPROVALS, BY COUNTRY, VOLUME AND VALUE

2004–05 2005–06 2006–07

VOLUME LITRES MILL.

VALUE A$ MILL.

VOLUME LITRES MILL.

VALUE A$ MILL.

VOLUME LITRES MILL.

VALUE A$ MILL.

United Kingdom 262.6 966.8 269.2 960.3 280.9 974.3

United States of America 186.3 896.7 213.0 901.1 220.2 959.6

Canada 44.1 247.4 51.0 249.2 49.4 266.3

New Zealand 24.9 94.0 27.4 92.0 36.0 101.3

Ireland 10.7 54.0 11.8 54.0 15.0 70.1

Germany 30.8 71.7 38.0 75.6 40.1 65.6

Netherlands 13.7 45.9 14.6 45.3 22.1 65.3

Sweden 11.0 36.2 15.4 49.6 15.4 51.1

China 2.2 9.9 12.0 20.8 22.9 49.1

Japan 9.5 48.7 8.0 44.1 9.5 48.9

Denmark 14.4 42.3 17.5 48.7 17.7 48.2

Singapore 4.2 33.1 5.2 37.6 5.3 42.8

Hong Kong 3.1 20.0 3.8 25.1 4.0 26.4

Belgium-Luxembourg 6.2 22.2 6.9 21.8 9.6 25.7

Malaysia 2.4 18.8 2.5 18.4 2.5 19.6

Switzerland 4.6 19.6 4.1 19.1 4.0 18.1

Norway 3.5 13.5 3.8 14.3 4.9 17.0

Finland 2.4 9.6 3.2 12.4 4.7 16.9

France 7.6 15.7 8.0 13.7 10.6 14.9

South Korea 1.4 6.8 1.4 7.6 2.4 12.6

Other 15.6 75.2 19.0 88.6 20.4 98.7

Total 660.8 2 748.2 735.7 2 799.3 797.7 2 992.3

Note: Top 20 destinations in 2006–07 ranked by value Value is FOB. Includes revisions.Source: AWBC Export Approval Database


AUSTRALIAN WINE EXPORT APPROVALS, MAJOR DESTINATIONS, 2006–07 (‘000 Litres)

WINE UK USA CANADA GERMANYNEW

ZEALAND CHINA OTHER TOTAL

Still Wine 272 322 218 038 48 457 40 107 33 428 22 786 144 409 779 548

Red 156 055 140 758 35 045 27 048 17 650 21 708 98 724 496 988

White 116 267 77 280 13 412 13 060 15 778 1 078 45 685 282 559

Sparkling 8 172 1 617 572 22 2 166 85 3 514 16 149

Fortifi ed 377 509 163 1 219 16 168 1 452

Carbonated 3 0 0 0 150 11 46 209

Sherry 0 0 248 0 12 0 68 330

Other 0 0 0 0 0 0 10 10

Total 280 874 220 164 49 441 40 130 35 975 22 898 148 216 797 699

Note: May not total due to roundingSource: AWBC Export Approval Database

AUSTRALIAN WINE EXPORT APPROVALS, MAJOR DESTINATIONS, 2006–07 (A$ ‘000 FOB )

WINE UK USA CANADANEW

ZEALAND IRELAND GERMANY OTHER TOTAL

Still Wine 932 079 944 666 260 789 89 798 67 583 65 360 534 080 2 894 354

Red 558 467 677 496 201 366 62 821 39 338 49 219 402 531 1 991 239

White 373 612 267 169 59 423 26 977 28 245 16 141 131 549 903 116

Sparkling 41 078 10 102 3 566 10 112 2 480 176 19 195 86 707

Fortifi ed 1 172 4 797 1 040 1 040 9 15 1 290 9 363

Carbonated 9 0 0 339 0 0 315 664

Sherry 11 10 934 26 0 0 168 1 149

Other 0 0 0 0 0 0 57 57

Total 974 349 959 574 266 328 101 316 70 072 65 551 555 105 2 992 295

Note: May not total due to rounding. Includes revisions.Source: AWBC Export Approval Database


APPENDIX 2BRANDY IMPORTS CLEARED FOR ENTRY (Litres of Alcohol)

SOURCE FRANCE GREECE ITALY NZ SPAIN OTHER TOTAL

1996–97 Bottled* 294 033 4 413 4 304 10 827 4 217 7 488 325 282Bulk** 297 801 0 6 3 957 0 932 302 696Total 591 834 4 413 4 310 14 784 4 217 8 420 627 978

1997–98 Bottled* 336 384 5 820 5 749 11 135 4 186 8 862 372 137Bulk** 286 882 0 3 987 0 1 231 289 102Total 623 266 5 820 5 752 12 122 4 186 10 093 661 239

1998–99 Bottled* 326 007 4 739 6 024 9 539 3 724 6 840 356 872Bulk** 240 345 0 0 326 0 731 241 402Total 566 352 4 739 6 024 9 865 3 724 7 571 598 274

Change in series1999–00 <57% (a) 362 531 6 120 3 790 7 645 2 919 6 430 389 434

>57% , <80% (a) 187 329 0 0 0 34 153 187 516Total 549 860 6 120 3 790 7 645 2 953 6 583 576 951

2000–01 <57% (a) 318 758 4 894 2 330 6 720 2 020 4 758 339 481>57% , <80% (a) 164 234 25 56 0 0 10 164 325Total 482 992 4 919 2 386 6 720 2 020 4 769 503 806

2001–02 <57% (a) 310 039 6 357 1 895 5 816 1 510 6 463 332 079>57% , <80% (a) 242 778 0 0 0 0 1 952 244 730Total 552 817 6 357 1 895 5 816 1 510 8 415 576 809

Change in series2002–03 (b) Bottled* 477 051 5 826 1 657 4 199 1 696 3 864 494 294

Bulk** 7 579 0 186 0 0 881 8 647< 57% (a) 17 056 490 435 482 222 543 19 230>57%, <80% (a) 34 551 0 0 0 0 0 34 551Total 536 237 6 317 2 279 4 682 1 918 5 289 556 721

Change in series2003–04 Bottled* 516 649 6 781 2 204 1 858 1 761 5 611 534 864

Bulk** 4 655 24 124 323 0 325 5 451Total 521 304 6 804 2 328 2 181 1 761 5 937 540 315

2004–05 Bottled* 503 635 6 788 1 482 188 1 426 4 742 518 260Bulk** 905 0 0 0 0 0 905Total 504 539 6 788 1 482 188 1 426 4 742 519 165

2005–06 Bottled* 483 134 3 833 1 119 0 700 5 091 493 878Bulk** 278 0 155 0 0 0 433Total 483 412 3 833 1 274 0 700 5 091 494 311

2006–07 Bottled* 437 623 5 338 437 0 427 2 573 446 398Bulk** 17 0 0 0 218 0 235Total 437 640 5 338 437 0 645 2 573 446 633

* In containers not exceeding 5 litres ** In containers exceeding 5 litres (a) Alcohol content by volume(b) In 2002–03, volume was measured by alcohol content for the month of July 2002, thereafter either as bottled or bulk.na Not available – zero or included in ‘Other’Source: ABS special report


WINE IMPORTS CLEARED FOR ENTRY (‘000 Litres and A$ ‘000)

STILL SPARKLING CARBONATED SHERRY DESSERT TOTAL

FORTIFIEDVERMOUTH &

FLAVOURED OTHERTOTAL

VOLUMETOTAL VALUE

1981–82 6 330 1 648 (a) 80 268 348 72 56 8 454 na

1982–83 5 370 1 836 (a) 70 184 254 77 61 7 598 na

1983–84 6 607 2 462 (a) 76 170 246 90 72 9 475 26 692

1984–85 8 787 2 974 (a) 130 205 335 135 106 12 336 36 042

1985–86 8 495 3 033 (a) 154 179 333 312 117 12 345 46 410

1986–87 5 042 1 966 (a) 86 118 204 261 194 7 667 37 585

1987–88 5 683 1 910 (a) 78 101 179 206 173 8 151 41 358

1988–89 6 086 2 262 (a) 102 209 311 262 814 9 735 46 871

1989–90 6 595 2 213 (a) 82 103 185 231 1,208 10 432 52 692

1990–91 5 604 1 890 (a) 82 108 190 224 1,091 8 999 46 779

1991–92 5 190 2 373 (a) 55 105 160 227 751 8 701 45 649

1992–93 4 710 2 343 (a) 51 56 107 200 467 7 828 46 984

1993–94 4 235 2 287 (a) 44 102 146 211 1,255 8 134 47 637

1994–95 9 410 2 682 (a) 70 201 271 235 1,408 13 997 61 057

1995–96 17 177 2 291 (a) 55 49 104 304 275 20 151 60 478

1996–97(b) 10 024 2 752 (a) 63 41 104 298 395 13 574 66 503

1997–98 21 391 2 996 207 105 30 135 612 281 25 622 92 928

1998–99 20 096 2 915 305 42 50 92 580 268 24 255 102 546

1999–00 13 087 3 827 181 na na 521 814 1 176 19 607 113 868

2000–01 7 298 2 917 275 na na 106 966 1 085 12 647 91 771

2001–02 8 589 3 284 291 na na 201 1 382 631 14 378 115 291

2002–03 11 070 3 852 368 na na 190 1 074 539 17 094 139 158

2003–04 11 817 4 789 286 na na 734 525 513 18 664 152 375

2004–05 14 782 5 189 313 na na 253 974 631 22 142 188 222

2005–06 19 603 5 933 260 na na 133 871 348 27 149 234 357

2006–07 25 471 7 079 871 na na 123 364 419 34 327 306 917

(a) Included in sparkling (b) Revisions not incorporated prior to 1997–98na not available or included in Total Fortifi edNote: May not total due to rounding. Excludes must.Source: ABS special report


APPENDIX 2WORLD WINE TRADE BY VOLUME & VALUE

EXPORTING COUNTRY

VOLUME (MILLION LITRES)

VALUE MILLION

US$

1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2005

Italy 1 596 1 616 1 751 2 065 1 938 1 668 1 647 1 345 1 429 1 575 3 691

France 1 383 1 671 1 774 1 727 1 662 1 718 1 635 1 593 1 484 1 478 6 963

Spain 740 1 045 1 174 917 999 1 067 1 058 1 199 1 472 1 443 1 903

Australia 148 172 199 258 311 375 471 524 643 702 2 130

Chile 180 216 231 235 277 305 345 395 475 422 885

United States of America 163 206 254 265 279 243 260 330 392 348 620

Moldova 181 282 135 147 196 259 304 373 294 321 278

South Africa 89 111 118 129 140 173 225 352 293 311 596

Germany 273 260 242 245 254 241 245 271 278 284 668

Argentina 139 142 109 140 102 94 111 166 168 222 308

Portugal 196 250 226 197 188 161 176 254 334 210 574

Bulgaria 184 152 153 99 77 88 84 71 92 114 93

Austria 24 25 26 31 36 55 80 87 74 70 103

Hungary 109 103 109 88 81 66 75 69 53 61 69

New Zealand 11 13 15 17 19 22 25 29 32 51 332

Denmark 5 0 11 10 18 8 39 13 35 39 93

Georgia 12 21 21 12 19 24 25 36 42 38 71

United Kingdom 36 53 40 31 32 43 41 24 33 36 236

Greece 61 48 71 45 40 46 38 58 35 34 72

Romania 45 92 65 35 25 38 48 41 38 27 22

Belgium-Luxembourg 25 30 30 28 27 35 0 57 23 21 112

Other 309 286 219 180 159 173 157 247 294 276 683

Total 5 909 6 797 6 974 6 899 6 879 6 902 7 087 7 535 8 011 8 083 20 504

Countries exporting 20 million litres or more in 2005 ranked by volume.na. Not availableNote: May not total due to rounding. Source: The Global Wine Statistical Compendium, 1961–2005


WORLD WINE TRADE BY CONTAINER (Million Litres)

EXPORTING COUNTRY

2004 2005

BOTTLED BULK SPARKLING TOTAL BOTTLED BULK SPARKLING TOTAL

Italy 891 456 82 1 429 997 491 87 1 575

France 1 005 317 161 1 484 981 332 165 1 478

Spain 508 864 100 1 472 493 874 76 1 443

Australia 502 131 10 643 520 169 13 702

Chile 270 203 1 475 274 147 1 422

United States of America 298 85 9 392 227 112 9 348

Moldova 190 96 8 294 206 107 8 321

South Africa 199 92 2 293 199 109 2 311

Germany 216 49 13 278 222 48 14 284

Argentina 113 53 2 168 138 81 3 222

Portugal 180 154 0 334 146 63 0 210

Bulgaria 72 19 1 92 89 24 1 114

Austria 38 36 0 74 38 31 1 70

Hungary 22 29 3 53 26 32 3 61

New Zealand 28 0 4 32 45 2 4 51

Denmark 18 17 0 35 16 22 1 39

Georgia 39 2 1 42 36 1 1 38

United Kingdom 28 4 2 33 29 5 2 36

Greece 30 5 0 35 27 5 2 34

Romania 4 33 0 38 5 22 0 27

Belgium-Luxembourg 20 1 2 23 17 2 2 21

Other 133 133 28 294 119 128 29 276

Total 4 803 2 777 431 8 011 4 852 2 807 423 8 083

Countries exporting 20 million litres or more in 2004. Ranked by volume.na. Not availableNote: May not total due to rounding. Source: The Global Wine Statistical Compendium, 1961–2005


APPENDIX 2PER CAPITA CONSUMPTION – Highest consuming countries (L/person/year)

COUNTRY 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

France 60.2 60.2 61.3 59.5 58.2 57.0 58.2 54.7 54.8 53.7

Italy 54.5 53.8 55.4 54.9 53.5 52.4 51.0 51.1 49.4 48.1

Portugal 54.5 52.5 50.7 50.6 45.9 46.8 46.3 52.6 47.9 46.6

Croatia 35.8 45.1 47.2 45.0 42.0 43.2 42.5 42.5 42.5 42.5

Switzerland 40.8 40.9 41.0 41.4 43.1 42.9 42.0 41.4 40.9 38.9

Spain 31.0 35.9 36.4 35.0 34.5 34.8 34.1 33.6 33.4 33.8

Denmark 27.8 28.8 29.6 29.5 30.5 33.2 31.9 31.8 32.0 32.8

Hungary 30.3 29.0 29.2 31.6 31.5 32.1 34.8 31.6 31.9 32.1

Uruguay 30.1 30.7 30.5 32.0 32.0 31.9 32.0 32.0 32.0 32.0

Austria 32.6 31.0 31.0 31.0 30.6 28.3 29.6 29.3 29.6 29.5

Argentina 38.2 37.5 35.1 34.3 33.7 32.1 31.6 32.1 28.6 27.9

Greece 24.1 24.7 27.0 28.1 26.2 26.9 22.1 22.3 26.7 27.3

Romania 24.3 30.1 19.7 25.9 23.2 21.0 22.2 22.6 26.0 26.5

Germany 23.0 22.9 23.1 24.0 24.5 24.3 24.6 24.4 23.7 23.8

Netherlands 15.0 15.4 14.0 16.0 19.5 20.8 20.7 22.1 22.2 22.7

Australia 18.1 18.8 19.5 19.7 20.3 20.6 20.5 21.3 21.9 22.5

Belgium-Luxembourg 23.0 23.0 22.1 22.1 25.8 22.4 25.4 22.1 22.2 22.2

New Zealand 16.2 17.0 16.1 16.3 18.7 17.9 17.1 18.1 19.2 20.8

United Kingdom 12.9 14.0 14.2 14.4 15.4 16.6 16.7 18.7 18.9 19.9

Ireland 7.0 7.8 8.7 9.9 11.0 12.2 12.7 13.7 17.1 18.5

United States of America 7.4 7.5 7.6 7.6 7.4 7.4 7.7 8.1 8.3 8.5

Source: The Global Wine Statistical Compendium, 1961–2005


APPENDIX 3GLOSSARY OF TERMS & ACRONYMS

AAT Administrative Appeals Tribunal

ABS Australian Bureau of Statistics

Act Australian Wine and Brandy Corporation Act, 1980

AGM Annual General Meeting of the Industry

AWBC Australian Wine and Brandy Corporation

AWO Australian Wine Overseas program

Board The Members of the Corporation

CAC Act Commonwealth Authorities and Companies Act, 1997

COPS Centre of Policy Studies, Monash University

CIES Centre for International Economic Studies, University of Adelaide

Corporation Australian Wine and Brandy Corporation

FIVS International Federation of Wine and Spirits

FOB value Free on Board value

FOI Act Freedom of Information Act, 1982

GIC Geographical Indications Committee

LIP Label Integrity Program

Minister Minister for Agriculture, Fisheries and Forestry

OH&S Occupational Health and Safety

OIV International Organisation of Vine and Wine

Regulations Australian Wine and Brandy Corporation Regulations 1981

RPN Register of Protected Names

WEA Wine Export Approval system

WFA Winemakers’ Federation of Australia

WGGA Wine Grape Growers Australia

WWTG World Wine Trade Group


COMPLIANCE INDEX

Page

Commonwealth Authorities and Companies Act 1997

Annual Operational Plan 10, 13

Assessment of Performance 13

Audit Committee 33

Certifi cation 2

Corporate Governance Statement 33

Corporate Plan 10, 13

Developments since end of Financial Year 29

Disability Strategy 41

Enabling Legislation 9

Financial Statements 51

General Policies of Government 40

Indemnities and Insurance Premiums for Offi cers 41

Judicial Decisions and Reviews by Outside Bodies 40

Legislative Functions 10

Legislative Objects 9

Location of Major Activities and Functions 82

Meeting Attendance 37

Meetings Held 37

Members of Committees 37


Ministerial Directions 40

Organisational structure 39

Portfolio Budget Statement 29

Responsible Minister 10

Review of Operations 13

Risk Factors 34

Service Charter 34

Signifi cant Changes in State of Affairs 29

Signifi cant Events 29

Stakeholders 10

Statements of Expectations/Intent 10

APPENDIX 4

Page

Australian Wine and Brandy Corporation Act 1980

Geographical Indications Committee Report 28

List of Final Determinations of Geographical indications 28


Variation of Annual Operational Plan 10

Variation of Corporate Plan 10

Other Legislation or Reporting Requirements

Ecologically Sustainable Development & Environmental Performance 41

Fraud Control 7

Freedom of Information 40

Funding of Consultancy Costs for Industry Representative Organisations 41

Occupational Health and Safety 40


ALPHABETICAL INDEX

Page

A

Administration 40

Annual General Meeting 36

Annual Operational Plan 10, 13

Audit 33

Audit and Finance Committee 33, 37

Audit Report 52

Australian Wine

Domestic Market 46

Exports 47

Outlook 49

Production 44

Australian Wine Overseas 17, 29

B

Board

Attendance at Meetings 37

Composition 33

Meetings 33

Members 34

Responsibility 33

C

Canada Report 31

Chairman’s Report 4

Chief Executive’s Report 6

Clients 10

Client Service Charter 34

Committees

Attendance at Meetings 37

Membership 37

Compliance 7, 9, 22

Compliance Advisory Committee 34, 38

Compliance Index 106

Consultancy Payments to Industry Organisations 41

Continental Europe Report 32

Corporate

Governance 33

Performance 13

Corporate Plan 10, 13

DDevelopments since Year End 29

Directions to 2025 4, 6, 18

Directory 82

Disability Strategy 41

E

Ecologically Sustainable Development 41

Enabling Legislation 9

Environmental Performance 41

Export Approval Process 22

F

Financial

Results 29

Statements 51

Fraud Control 7

Freedom of Information 40

Functions of the Corporation 10

G

Geographical Indications 28

Geographical Indications Committee 28, 34, 38

George Mackey Memorial Trophy 36

Glossary 105

I

Indemnities 41

Insurance Premiums 41

International Trade Advisory Committee 34, 38

Ireland Report 30

APPENDIX 5

Page


APPENDIX 5

S

Signifi cant

Changes 29

Events 29

Staff 7, 40

Stakeholders 10

Statement of Expectations/Intent 10

Statement on Governance 33

T

Trade 7, 9, 25

U

United Kingdom Report 30

United States of America Report 31

W

Wine Australia Brand Development 13

Wine Australian Export Partnership 14

Wine Industry – Year in Review 42

Wine

Inspections 22

Inspectors 22, 83

World Wine

Production 42

Trade 43

Y

Year in Review 13

Page

J

Japan Report 32

Judicial Decisions 40

K

Knowledge Development 7, 9, 18

Knowledge Development Advisory Committee 34, 37

L

Label Integrity Program 23

Legislation Review Committee 34, 37

Licence to Export Grape Products 22

M

Management 33

Market Development 6, 9, 13

Market Development Advisory Committee 34, 37


Minister, Responsible 10


Mission Statement 9

O

Objects of the Act 9

Occupational Health and Safety 40

Organisational Structure 33, 39

Overview 9

P

Planning Framework 10

Principal Outcome 13

Principal Outputs 13

Powers of the Corporation 10

R

Regional Reports 30

Register of Protected Names 28

Remuneration Committee 34, 37

Reporting Framework 10

Responsible Minister 10

Reviews by Outside Bodies 40

Risk Factors 34

Page

Foundation Partner

Partners

Desi

gn a

nd P

rodu

ctio

n Co

rpor

ate

Profi

le P

ty L

td

The Australian Wine and Brandy Corporation gratefully acknowledges the support of the following Partners

Published by:

Australian Wine and Brandy Corporation National Wine Centre – Industry House Cnr Hackney and Botanic Roads, Adelaide, SA 5000

Postal Address: PO Box 2733, Kent Town, SA 5071Telephone: +61 8 8228 2000Facsimile: +61 8 8228 2022E-mail: [email protected]: www.wineaustralia.com

© Australian Wine and Brandy Corporation 2007

ISSN 1442–9535

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Australian Wine and Brandy Corporation ANNUAL REPORT 2006–2007


Annual Report 2006–2007