Agency overview and resources

Established in 1984, the Australian Wine and Brandy Corporation (AWBC) provides strategic support to the Australian wine sector by delivering services designed to generate a sustainable increase in the demand for Australian wine in both domestic and international markets.

1.1 Strategic Direction

The global financial crisis, combined with retail consolidation and competition from other wine producing countries has dampened the global demand for Australian wine while in Australia, an oversupply of winegrapes, drought, bushfires and a number of other challenges have threatened the viability of both grape growers and wine producers.

The Corporation is not immune from these challenges as it derives nearly all of its revenue from the Australian wine sector. The downturn in the industry has directly impacted on the Corporation’s ability to provide the sector with the services it requires.

The Corporation will work closely with the industry’s research organisation, the Grape and Wine Research and Development Corporation and the two industry organisations, the Winemakers' Federation of Australia and Wine Grape Growers Australia to develop coordinated strategies to address the challenges faced by the wine sector and to develop a more sustainable funding model that will enable the Corporation and the other industry organisations to deliver the services the sector requires.

The Review of Wine Industry National Organisational Structures recognised the need for a closer alignment of the national organisations to develop a unified strategy and to coordinate the delivery of services.

The Corporation is committed to this process and will work closely with the other national organisations to ensure that the strategic support it delivers to the Australian wine sector is targeted, coordinated and efficient. At a time when the Corporation’s revenue stream is under pressure, this is more important than ever.

In consultation with other peak wine organisations, the Corporation has developed a new Corporate Plan that defines the strategies devised to achieve its legislated objectives over the next three years.

The Corporation’s Corporate Plan is focussed on delivering the following high-level objectives:

• a market environment that acknowledges and responds positively to Australian branded wine as a premium product.
• supporting the competitiveness of the Australian wine sector through the collection, interpretation and dissemination of global wine sector intelligence.
• protecting and enhancing the international reputation of Australian wine.
• contributing to the achievement of an international trading environment free of distortions that allows unimpeded access to Australian wine.

The principal actions to be undertaken during the 2009–10 year to progress the achievement of those high-level objectives include the following.

1.1.1 Market Development

As a country that produces far more wine than is required to service its domestic market, Australian is heavily reliant on exports for the continuing prosperity of its wine sector. Strong export demand not only benefits wine exporters but also those producers who do not export by removing wine that would otherwise compete for sales with their products.

The Corporation will continue to focus its marketing activity on export markets as this sector has the greatest potential to expand the overall demand for Australian wine. However, the growth in wine imports in recent years supports the need for some targeted marketing activity in the Australian market.

Intense global competition has demonstrated that the sale of Australian wine into the lower price points is not sustainable. The Corporation’s Wine Australia brand segmentation strategy encourages consumers to trade up through a clear communication of the four different ‘personalities’ of Australian wine. The Corporation’s marketing activities in 2009–10 will continue to centre on the delivery of this brand segmentation strategy through key international markets as well as the domestic Australian market.

With the global financial crisis impacting heavily on Australia’s traditional wine markets, the Corporation’s decision to launch a dedicated wine marketing program in China in 2008–09 has been vindicated. China continues to be one of the most promising emerging markets for Australian wine. The Corporation will expand its activities in China and look for similar marketing opportunities in other north eastern Asian countries.

1.1.2 Knowledge Development

The Corporation’s access to Australian wine export data via the Wine Export Approval system is a valuable asset for the Australian wine sector and it forms one of the foundation data sets in the Corporation’s on-line information service – winefacts.

Enhancements will be made to winefacts to improve its ease of access, to facilitate the production of customised reports and by developing targeted product packages and delivery.

Following the appointment of new members to the Knowledge Development Advisory Committee, the range of Knowledge Development activities and products will be reviewed to ensure that the information provide is relevant and delivers the most benefit for the limited resources available.

1.1.3 Compliance

As the global market for wine becomes more competitive, consumers’ trust in the truthfulness of wine labels and the quality of the products becomes even more critical. Australia’s export approval regime that is designed to maintain this trust by ensuring the quality and integrity of Australian wine provides the sector with a competitive advantage.

The Corporation will continue to ensure that exported wine is free of faults and will monitor the integrity of wine labels through a combination of wine export controls and the label integrity program.

The education of wine producers and exporters on their legal responsibilities will continue to be a major focus in an endeavour to prevent problems occurring and we will continue to forge relationships with the wine regulators in other countries so that any problems that do occur can be addressed promptly and effectively.

1.1.4 Trade

As a major exporter of wine, access to overseas markets is critical to Australia’s success in the face of heightened competition and other global trading challenges. The Corporation will continue to work with relevant Australian Government departments and wine sector representatives to secure the removal of both tariff and non-tariff barriers to the free trade in wine.

The Corporation will ensure that the interests of the wine sector are fully considered in any negotiations undertaken by the Australian Government on free trade agreements with Australia’s trading partners. 

1.2 Agency resource statement

Table 1.1 shows the total resources from all origins. The table summarises how resources will be applied by outcome and by departmental classification.

Table 1.1:  CAC Act Body Australian Wine and Brandy Corporation Resource Statement—Budget estimates for 2009–10 as at Budget May 2009

1.3 Budget Measures

The AWBC is not affected by any 2009–10 budget measures.

1.4 Transition from outcomes and outputs to outcomes and programs

From the 2009–10 Budget, all General Government Sector (GGS) entities will be reporting on a program basis. The table below outlines the transition from the 2008–09 Budget year (as at Additional Estimates) which was presented in administered items, outputs and output groups to the program reporting framework used for the 2009–10 Budget. The table also captures revisions made to GGS outcome statements under the Operation Sunlight Outcome Statements Review.

Figure 2: Transition table