Australia's wine glut
The Wine Economist reports that Australia's overproduction of wine has reached a crisis point:
Australia has an accumulated surplus of 100 million cases of wine that will double in the next two years if current trends continue, according to the report. The annual surplus is huge – equal to all UK export sales and there is no clear prospect of finding additional demand, either domestic or foreign, to fill this gap. ...
In fact, wine exports have fallen by 8 million cases or more than 20 percent in the last two years, according to the statement, with the largest declines in the high value wines that Aussie winemakers hoped would be their future.
Inexpensive and bulk wine sales have grown, but at prices that are unsustainably low.
We have too big a financial industry. They have too much wine. Maybe we can arrange a trade?
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The two things may actually be related. In the boom years *36.7% of high paid Australian business execs, bankers, and others on huge bonuses or large salaries bought or established a vineyard with their new found wealth.
In all seriousness, i'm sure lifestyle factors rather than rational investment decisions played some role in the glut of Australian vineyards and wine production.
(* a totally made up figure)
marcus.
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When are you gonna start *your* winery, Marcus?
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Actually, it might make sense: You could buy grapes on the cheap and ferment them in some unoccupied downtown Newcastle commercial space.
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For readers wondering what the heck I'm talking about: http://curiouscapitalist.blogs.time.com/2009/08/28/why-are-commercial-real-estate-markets-so-often-gridlocked/
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I'm not convinced about the winery idea. On the other hand, I can definately see a microbrewery in my future!
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