By David Humphries
AT THE risk of insensitivity, the earthquake that has affected Chile's previously robust wine industry has provided a rare glimmer of opportunity for an Australian sector that mostly has gone backwards.
There are more than 100 million cases of Australian wine languishing in storage without throats to lubricate.
While our exports fell by 8 million cases and 21 per cent of value from an October 2007 peak, Chile generally rode a wave of export success, pegging back Australia's long-time lead.
The managing director of Angove Wines, John Angove, said yesterday Australia had plenty of extra stock and production capacity to meet shortfalls.
One report yesterday put the Chilean loss at 12 per cent of the 2009 vintage - 125 million litres. The quake on February 27 also devastated production capacity, from vineyards to wineries.
''Without wishing to take advantage of an export rival's devastation, Australia has large surpluses in stock and growing capacity to help meet any new shortfalls,'' Mr Angove said.
But this could be achieved only if Australia could meet Chile's relatively low prices. Therein lies Australian wine's biggest challenge.
In a November statement to producers, the Winemakers' Federation of Australia, Wine Grape Growers' Australia and the federal government said the global financial crisis had not helped but was ''far from the only factor'' dragging down Australian wine profits.
''A strong dollar and our industry's cost competitiveness have been more significant,'' the statement said. Australia had lost more ground in higher priced wines and any growth at the lower end was unprofitable.
''Better economic conditions will not automatically restore previous demand and even if they do, this would be insufficient to deal with our fundamental problem.''
One in five Australian grape vines are surplus to requirements and at least 17 per cent of vineyard capacity is uneconomic. Australia produces 20 to 40 million cases a year more than it sells, the equivalent of annual sales to Britain, where Australian wine dominates. ''Our surplus exceeds 100 million cases and at current rates of production and demand, this will more than double in two years,'' the statement said.