Friday, March 26, 2010

Wine Cheaper Than Water And Coke.

WINE is now cheaper than water and Coke, courtesy of a grape glut, a surging dollar and changing tastes.

Woolworths' large-format liquor chain Dan Murphy's is selling 82,000 750ml cleanskins at $1.99 apiece.

By comparison Woolies charges $2.25 for Pump 750ml water bottles and $3.07 for 600ml of Coca-Cola - equal to $3.84 for 750ml.

"In my 15 years in the wine industry I can't remember a time when drinkers enjoyed better value for money," Dan Murphy's merchandise head Steve Donohue said.

So how do you sell wine for $1.99?

By buying it for as little as 45c/litre.

That's the rumour in the Riverina district, where Dan Murphy's is known to have bought the product.

Australia's wine industry has been facing a grape glut since 2007. And it is getting worse, with a new winery opening every two days.

In previous years much of the oversupply has been exported.

But the rising Australian dollar has made this harder - wine from Chile, Argentina and South Africa has become more attractive to both UK supermarkets and their customers.

The volume of wine exported fell 11 per cent last year, the first fall since 1995, meaning more has to be sold locally, depressing the price.

An extra 1.8 million litres of bottled white wine was sold in Australia in the three months to the end of September from a year earlier, Bureau of Statistics data show. For red wine the figure was 250,000 litres.

In the Riverina, the new pressure is the need to empty storage tanks before the new crop next month.

Producers' pain is drinkers' gain.

"You are paying less and getting as good quality," Mr Donohue said.

The $1.99 cleanskins are chardonnays and cabernet merlots, which lost market share to New Zealand cabernet sauvignon and Australian shiraz respectively.

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