Updated 28 Oct 2015, 7:52am
The peak body for Australian winemakers has appeared before a Senate hearing in Western Australia to make the case for industry reform.
Winemakers' Federation of Australia president Tony D'Aloisio and chief executive Paul Evans appeared at a special Senate committee hearing in the Swan Valley winemaking region today.
The Rural and Regional Affairs Transport Reference Committee has been hosting Australian Grape and Wine Industry hearings around Australia as part of an inquiry into the wine industry.
The winemakers' federation was joined in the Swan Valley by Wines of WA and other industry representatives.
Winemakers' federation CEO Paul Evans said the group was seeking to discuss issues relating to profitability, marketing, and supply and demand.
He said the future of the Wine Equalisation Tax was an important area of discussion.
The tax, known as WET, is based on the wholesale value of the wine.
Winemakers can claim a rebate of up to $500,000, which is intended to benefit smaller producers, but the tax and its rebate are under review by the Federal Government.
Mr Evans said money saved by any reform of the tax should be reinvested to boost marketing overseas.
Winemakers say something has got to give
Great Southern winemaker Kim Tyrer said the cost of production put Australian winemakers at a global disadvantage.
Ms Tyrer, who is also president of Mount Barker Wine Producers Association, said Australia spent "very little" on marketing overseas.
"Our competitors in the same market spend a lot more both time and money marketing their own respective wine industries," she said.
"So we're very much behind the eight ball."
Ms Tyrer said Australian winemakers needed support to operate in a premium market because of their high cost of production.
"We can't be competitive at the lower end of the market," she said.
"And if you think about the premium end, that's pretty much the French — so that's a pretty dominant brand."
Grant Brinklow, from Sandalford Wines in Margaret River and the Swan Valley, said government assistance was fundamental for Australian winemakers to remain competitive.
Mr Brinklow said marketing wine overseas was critical to success.
He said the promotion of the Federal Government's Brand Australia program was well recognised, but he said most promotion of industry came from industry itself.
"Australia hasn't collaborated to the same extent from a government perspective as other producing countries," he said.
Mr Brinklow said many producers struggled to remain profitable in their business, despite the high value of the product.
He said most producers did not have surplus funding available for marketing, which was why he believed government support was essential.
To listen to the radio interview click here
Australian wine exports have increased in both volume and value in the past 12 months, bringing welcome news for local producers in Western Australia.
Figures released by the Australian Grape and Wine Authority (AGWA) show that Australian exports rose in volume by 3.6 per cent and in value by 3.9 per cent in the 12 months to March.
AGWA CEO Andreas Clark says any rise in volume and value is significant after a slowed interest in Australian wine over the past decade.
"It comes off the back of challenging times in the recent past, and [the market] continues to be tough for many parts of the sector, but these numbers are obviously positive," he said speaking to ABC Local Radio's Country Hour.
"They are a strong signal that there's been uplift in some of our key markets and overall it's a pleasing result.
"We're seeing the overall average bottle of wine at its highest point for nearly a decade. So, these are strong signals that there's a continued growth story for the Australian wine sector".
Growth cannot be reduced to one factor
Mr Clark cited a number of factors contributing to renewed interest in Australian wine abroad, including the depreciating dollar and growth of key export markets.
"The major economies of the US and UK are rebounding and showing some growth, albeit off a low base. We've seen the austerity measures in China have caused a few hiccups, but that market's rebounding.
"We always look at a suite of factors at play and the [Australian] dollar helps, but it's not a panacea. You need to continue to work hard, get out into markets.
"It's a very competitive trading environment out there with other producing countries, so we need constantly be in front of people and getting the excitement back into what we have to offer," he said.
Australia's top five export markets include the US, UK, China, Canada and Hong Kong.
Export market critical for Western Australian producers
Kim Tyrer, President of Mount Barker Wine Producers Association, said that export growth represents opportunities for WA producers operating at the higher end of the market.
"In WA we can't compete on the cheaper, lower end, we have to be at the premium end of the market. China's very into red wine, so that suits us. The US are also very much into a similar sort of thing."
"The dollar figure is quite significant in terms of our economy and what we bring into the economy from exporting."
According to figures from the Wine Industry Association of Western Australia, WA produces around 45 million litres of wine annually, representing nearly 5 per cent of Australia's production volume, but 12 per cent of the total value.
WA produces nearly one quarter of Australia's fine wines, with around 70 per cent of vineyard area in the Margaret River and Great Southern regions.
Ms Tyrer said that the past 10 years have been tumultuous for local industry, but this has created an imperative to increase quality.
"The wine industry is very competitive and it's hard to sell your product, so it's forced us all to increase the quality of our product without a doubt.
"The key thing with export is that these things don't happen overnight. An order takes 12 months to two years to generate. So it's a lot of work. Unfortunately things don't happen quickly."