CoPS/IMPACT Working Paper Number G-173

Title: Will drought erode the competitiveness of Australia's wine industry?

Author: Glyn Wittwer


Australia's 2007 vintage was smaller than the previous few vintages as a consequence of drought and frost in 2006. Then the worst happened in the following year with an unprecedented second year of drought that resulted in severe cuts to water allocations for irrigators in the southern Murray-Darling Basin. This paper examines the medium-term prospects for the Australian wine industry using global projections to 2016 with the World Wine Model. The international growth prospects of commercial-premium wine matter to growers in irrigated regions of Australia. Overall, demand for commercial-premium wine is set to grow. This is despite a slowing of growth in Australia's number one market, the United Kingdom.
Research funded by the Grape and Wine Research and Development Corporation (GWRDC) of Australia.

JEL classification: C68, Q13.

Keywords: CGE modelling, wine consumption.

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