Small wineries proving worth

CONDITIONS could not be tougher for wineries that produce small volumes of wine, according to industry representatives congregating in Margaret River this week for the inaugural International Wine Tourism Conference.

Reducing distribution channels, the effects of the wine equalisation tax and increasing competition are placing pressures on the ability for wineries to produce reasonable profits.

According to Tourism Tasmania chairman John King small to medium-sized wineries that do not diversify and incorporate wine tourism into their businesses will fail to survive.

“For smaller wineries, those that produce up to 17,500 cases per year, tourism is crucial to their economic survival,” he said.

Mr King said domestic tourism was worth at least $3 billion a year, well above 1999 predictions of $1.1 billion.

Several sources spoken to by WA Business News said smaller wineries were vital to creating critical mass in wine regions and their survival was important to marketing regional wine tourism.