The challenge for Ausralian wine exporters is to defend market share while generating investment for new growth, says the Australian Wine and Brandy Association.

In its latest online newsletter, the association says the situation comes after 20 years of uninterrupted export growth.

“The confluence of maturing markets, slowing category momentum and the current global economic recession are all now conspiring to ask difficult, tipping point questions,” it says.

“Australia’s major wine export markets, the United Kingdom (UK) and the United States (US), have been hit particularly hard. The International Monetary Fund has forecast the UK economy to contract by nearly 3% in 2009, the biggest economic decline amongst Australia’s top ten wine markets.

“With contracting economies, it is no surprise that eight of the top ten wine exporting countries to the UK are currently seeing a reduction on MAT volume performance and similarly six of the top ten in the US.

“It could be argued that Australia’s recent volumetric gains have only been possible through momentum provided by an oversupply, and ability to provide wines at lower, and ultimately unprofitable, price points.

“However, this position can only be sustainably occupied by countries with lower cost bases than Australia.

“During the next 12 months, the successful management – and ultimate cessation – of over supply and the successful repositioning of Australia to command a credible premium in all markets, must be the two key priorities for our industry.

“The latter cannot be delivered until the former is achieved,” it concludes.