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Wine Overseas Marketing Act - Australian Wine Board - Report, together with statement by Minister regarding operation of Act - Year - 1971-72 (44th)


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THE PARLIAMENT OF THE COMMONWEAL TH O F AUSTRA LIA

197 3-Par/iwnentary Paper No . 27

AUSTRALIAN WINE BOARD

FORTY-FOURTH ANNUAL REPORT

FOR YEAR

1971-72

Presented pursuant to Statut e 4 A pril 1973

Ordered to be printed 12 A pri/1973

THE G O VE R N M E NT PRI NTE R O F AU STRA LIA

CA N BERRA 1973

~'

Australian Wine Board

Chairman

MEMBERS

Representing Proprietary and Privately Owned Wineries and Distilleries

Sou th A ustralia

New South Wale s and Qu eens land

Victoria

We stern Au stralia

Representing Co -operative Wineries and Distilleries

Representing Grapegrowers

Representing Commonwealth Government

OFFICE

Gen eral Manager

Secretary

AUSTRALIAN WINE CENTRE

Manager

I. H. SEPPELT , O .B.E.

I. H. SEPPELT , O .B .E .

T . W . HARDY

K. D . REID

E. W. W . PEATT

I. M . I. SMITH

0 . S . SEMMLER C . G . TUNBRIDGE

R . R . H 0 L L I C K

A . D. PREECE L. G. VITUCCI

R . S . SWIFT , O.B.E.

Bank Bu ilding, 25 Bank Street, A de laide South A ustralia 5000

A . M . LANDGREN

K. S . CHRISTIE -LIN G

25 Frith Street, Soho, London , W.1 V STR

G . S . FOULDS

Pag e One

Page Two

Wine Overseas Marketing Act 1929-1966

Statement by the Minister regarding the operation of the Act

In accordance with Section 29 of the Wine

Overseas Marketing Act 1929-1966, I present the Forty-fourth Annual Report of the Australian Wine Board, regarding the operation of the Act for the year ended 30 June, 1972.

(Signed) IAN SINCLAIR,

Min ister of State for Primary Ind ustry. Canberra,

October, 1972.

Australian Wine Board ESTABLISHED UNDER THE PROVISIONS

of the

WINE OVERSEAS MARKETING ACT

of the

COMMONWEALTH OF AUSTRALIA

FORTY-FOURTH ANNUAL REPORT

The Honourable the Minister for Primary Industry,

Canberra , A.C.T.

INTRODUCTION

In accordance with the provisions of the Wine Overseas Marketing Act 1929-1966 the Board has the honour to submit to the Minister its Forty " Fourth Annual Report covering the year ended 30 June, 1972.

INDUSTRY OPERATIONS IN BRIEF

The single most important factor affecting the operations of the Industry during 1971/72 was, as for the previous year, the imposition of excise on wine. This factor is commented on in more detail in the following section of this report.

Preliminary indications for the 1972 vintage are that 192 winemakers processed 338 ,000 tons of grapes for winemaking and distillation. This is some 14,000 tons less than the record 1970

vintage and a lessening largely attributable to unfavourable seasonal factors. It was , however , some 50,000 tons higher than the 1971 vintage, and wine production increased from 55,257,000 to 61,920,000 gallons.

Production of table wines (21 ,093,000 gallons) was markedly higher than that of the previous year while production of dessert wines, sherry and flavoured wines ( 11,943,000 gallons) was

less than that of the previous year. Table wine production now accounts for approximately 64 % of total beverage wine production whereas in 1966/67 it represented 49% of the total.

Approximately 29 million gallons of wine were distilled into brandy and fortifying spirit.

Total wine exports in 1971/72 were 1,744,554 gallons valued at $4,217,729, an increase in

value terms of approximately 18% . This w as attributable in large measure to a recovery in the United Kingdom market but supplies to all major markets grew to some extent.

Total exports of brandy we re 7 4,924 proo f gallons, valued at $407 ,145 . C om pa red with the previous year the quantity exported wa s dow n by more than 7% and the value of these exports fell by over 16%. This w ould see m to reflect the

increasingly price-competitive nature of w orld brandy markets.

Details of domestic wine sales for 1971 /72 are not available at the time of preparing this rep ort but monthly clearance figures indicate that demand is again increasing follow ing the set∑ back suffered at the time wh en excise w as first imposed. As forecast in la st year's r eport, 1970/71 sales did not reflect the g rowth rate in

excess of 10% which has com e to be rega rded

as normal for the industry and showed a negli∑ gible movement only, com pared w ith the previous year's figures.

Details of 1971/72 brandy sales are also not yet available but preliminary clearance figu res of brandy (including imported) for home consump " tion in Australia were 1,498 ,340 proo f gallons

compared with 1970/71 sales of 1,563 ,00 0 proo f gallons. These sales and clearance details need to be reviewed against the backgrou nd of total stocks of Australian brandy at 30 Jun e, 1972 of 6,145,000 proof gallons, which represents an

increase of nearly 900 ,000 proof ga llons in twenty-four months , and the increa sing share of the market being taken over by im ported brandy .

The Board's income from levy in 1971 /72 fell to $512,597 . The Board spent $308 ,283 on

publicity in Australia and $144 ,730 on pu blicity and services in overseas markets.

Pa ge Three

Following are some key statistics for the latest available year compared with the previous year:

Vintage 1971 1972

Number of Winemakers (crushing 10 tons and over) Vintage - Tons ....

184

288 ,894

192

338,000 (a)

Wine Production - Gallons (excludes grape spirit added) Brandy Production - Proof Gallons Fortifying Spirit Production - Proof Gallons

Trade

Wine Exports - Gallons Brandy Exports - Proof Gallons

55 ,257 ,000 1,482,573 4,035,686

1970/71

1,446,528 81,755

61 ,920,323 (a)

1 ,633,297 (a) 5,065 ,473 (a)

1971/72

1,744 ,554 74 ,924

Wine Sales - Gallons ....

Brandy Sales - Proof Gallons

1969/70

24,386,000 (1.2% Imported) 1.495,000

24,441,000 (1.4% Imported) 1,563,000 (17.5% Imported)

Not yet

available

( 11.9% Imported)

Finance

Income from Levy

Note: (a) Preliminary

$534,366 ( 1970 Vintage " Rate of Levy $1.50 per ton

of fresh grapes)

$512,597 ( 1971 Vintage " Rate of Levy $1.80 per ton

of fresh grapes)

More detailed tables are set out at the back of this report.

EXCISE DUTY ON WINE

On 18 August, 1970 the Commonwealth

Government introduced an excise duty of SOc a gallon on all Australian wine produced for com " mercial purposes for sale in Australia. The Board believes that this excise imposed a heavy burden on the Industry and notes that its earlier forecast that it would cause a severe setback to the Industry has been borne out by wine sales statistics . In fact wholesale sales for 1970/71 were only 55,000 gallons or 0.2% greater than the 1969/70 total.

It would be reasonable to assume that, in the absence of any excise, the continuance of the normal market growth pattern recorded in the preceding five years ( 11.8% p.a.) would have led to sales in excess of 27 .3 million gallons in 1970/71. The imposition of the excise would therefore seem to have resulted in the loss of more than 2.8 million gallons in sales for 1970/71 alone.

Unlike cash crop industries, the very nature of the vine and wine industry means that it cannot

Page Four

respond to any sudden shifts in the pattern of demand such as those involved in the imposition of excise, except through considerable hardship experienced during the course of a necessarily prolonged adjustment of the supply situation.

An independent inquiry undertaken for the Commonwealth Government by Professor J. McB. Grant, Professor of Applied Economics, University of Tasmania, and presented in April, 1972 re " ported on the immediate and longer-term effects of the excise. The report summarises the results of the inquiry as follows:

"The excise imposed in August, 1970 stopped the growth in sales for about a year and

although sales are now increasing again, for the next few years at least, they will be below what they would have been in the absence of the excise. The vineyards planted to mee t the demand for grapes expected before the excise was imposed are already in existence and in the event of there being a good vintage in any of the next few years, there may be a surplus of specialised wine grapes."

A Deputation from the Wine Industry met a number of Federal Ministers in May, 1972 to stress the Industry's concern at the effects which excise was having on the sales and stock position and renewed its request for the complete re " moval of the excise.

On 25 May the Minister for Customs and Excise announced that the excise would be reduced to 25c a gallon, the reduction to take effect as from the following day.

As would be expected, clearance figures for the 1971/72 financial year generally show in " creases over the corresponding period in the previous year. It is still too early to estimate what the outcome of halving the wine excise will have on the Industry but the fact brought out by Professor Grant remains valid, i.e. that sales under excise will, for the next few years

at least, be below what they would have been in its absence.

The disruptive effect of the excise can also be gauged clearly from the Industry's situation as revealed by the level of stocks upon which duty has not been paid. These stocks of fortified

wine which were at a normal level of 25.3 million gallons at 30 June, 1970 rose to 31 million gallons 12 months later and exceeded 33 million gallons at 30 June, 1972. Comparisons over a long

period cannot be made for table and sparkling wine, but it is significant that the stocks of these wines rose from 33.5 million gallons at 30 June, 1971 to 37.9 million gallons at 30 June,

1972.

PRODUCTION Grape Crop The preliminary estimate of grapes processed in the 1972 vintage is 338,000 tons of wh ich about 36,000 tons were sultanas, considerably greater than the 228,856 tons processed in 1971.

While there were record vintages in N ew South Wales and Victoria, seasonal factors reduced the South Australian crop and the total crop wa s below the record 352,000 tons processed in 1970.

It is clear that but for the unexpected reduc " tion in the South Australian crop, extreme diffi " culties would have been experienced in taking up the total crop. As it was, as late as February and March of this year, winem ake rs' estimated

requirements were only 318,000 tons, 20,000 tons below the eventual quantity offered. Consider " able difficulty was experienced in placing all available wine grapes but this object w as even " tually achieved, although the effect of these

efforts can be seen in the great increase in stocks of wine, brandy and fortify ing spirit. It was predicted that this situation would arise following the introduction of the wine excise duty,

because of the consequential lower demand for wine. In the event of a good vintage occurring w ith " in any of the next few years the Industry stock and sale situation could well res ult in its inability to take up available supplies of wine g rapes.

The following table show s the quan tity of grapes processed by wineries and distilleries over the past ten years. The breakdown shows the States in which the grapes were grown and

not where they were processed.

GRAPES PROCESSED BY WINERIES AND DISTILLERIES

(The following figures were obtained from Wine Grapes Charges Act assessm ents and refer to winemakers who crushed more than 5 tons)

Vintage Sth. Aust. ∑N.S.W. Vic. W .Aust. C'wealth(a)

'000 Tons

1963 111 38 13 5

1964 148 41 16 6

1965 158 43 16 5

1966 123 42 14 5

1967 165 47 21 5

1968 168 50 26 4

1969 207 61 22 6

1970 247 76 23 6

1971 200 51 32 5

1972 {b) 216 79 38 5

(a) The Commonwealth total includes grapes grown in Queensland and Tasman ia.

(b) Preliminary.

167

21 1

222

184

23 8

249

296

352

288

338

Pa ge Five

South Australia's sha re of the Australian total fell to 63.9% in 1972 compared with 69.4% in 1971 because of the seasonal factors noted above. New South Wales provided 23.4%

(17.8% in 1971) and Victoria 11.2% (10.8% in 1971) . The total area of vines at bearing age in Australia at June, 1971 including drying and table varieties was 132 ,611 acres. In addition there were about 25 ,000 acres of vines planted but not fully bearing. The area which provided grapes for winemaking in the 1971 vintage was approximately 95 ,000 acres, but the correspond "

ing area for 1972 is not yet known.

W ine Preliminary production statistics for 1972 are now available. They show that total wine pro " duced from the 1972 vintage including wine for distillation was 61 ,920,000 gallons, close to the record vintage of 63 ,127,000 gallons established in 1970. In 1972 29 million gallons of this wine was distilled for grape spirit and brandy.

Total table wine production in 1972 was

21,093,000 gallons, about 3.3 million gallons more than in 1971. Production of dessert wine, sherry and flavoured wine in 1972 on the other hand fell by 0.3 million gallons from the previous year to stand at 11,943,000 gallons.

Production details for the last ten years are set out on Page 21 of this report.

B randy Production of standard brandy increased from 1.483,000 proof gallons in 1970/71 to 1,633 ,000 proof gallons in 1971/72 based on preliminary statistics . Standard brandy is brandy distil led at a strength not greater than 83% by volume of alcohol. In some instances the pure grape

spirit is added to standard brandy to produce blended brandy. The quantity added in 1971/72 was 419 ,820 proof gallons.

The increase in production (as well as stock increases) is associated at least in part with the

Vintage

general slow down in wine sales and the effect of taking up grapes which would otherwise have become surplus. The increased stockpiling of production also results in part from the increas " ing inroads into the Australian market being made by imported brandy.

Further brandy production statistics are set out on Page 22 of this report.

RATE OF LEVY

The Board derives its income from a levy on winemakers and d:stillers who crush 10 tons or more of fresh grapes in a particular vintage. The levy is payable under the Wine Grapes Charges Act and Regulations. The maximum rates are $2 .50 per ton for fresh grapes and $7.50 per ton for dried grapes.

Dried grapes are used for production of fortify " ing spirit on ly under special circumstances when r.tuthorised by the Minister for Customs and Excise. During the period under review 1,324 tons of dried grapes were used .

Preliminary information for 1972 shows that 192 winemakers were liable to pay the levy com " pared with 184 in the previous year.

Operative rates of levy are reviewed by the Win e Board in October each year and the rate takes account of the Board 's programme for the financial year following each vintage. Th is arrangement works reasonably well although it

introduces a certain amount of inflexibility in the Board's operations, making it difficult to respond quickly to circumstances unforeseen at the time of fixing the rate of levy and hampering long term planning to some extent.

The operative rate for the 1972 vintage was $2.10 per ton for fresh grapes and $6.30 per ton for dried grapes.

The following schedule shows the operative and maximum rates of levy on fresh grapes over the past ten years:

.Rate per ton of Fresh Grapes

O perative Maximum

1963 $1.30 $1.50

1964 $1 .30 $1.50

1965 $1.30 $1.50

1966 $1.30 $1.50

1967 $1.50 $1.50

1968 $1.50 $1 .50

1969 $1.50 $1.50

1970 $1.50 $2.50

1971 $1 .80 $2.50

1972 $2 .10 $2.50

Page Six

OVERSEAS TRADE: GENERAL

Introductory Comments Several recent important developments over " seas impinge on the Australian wine and brandy industry.

With regard to exports to the United Kingdom, the imminent enlargement of the European Economic Community will place stringent re " straints on Australia's traditional wine exports. Among the obstacles are the imposition of refer " ence prices and the requirements for certificates of analysis. While some of the EEC's require "

ments have yet to be spelt out in detail, it appears that exporters could face severe cost handicaps unless reasonable solutions can be negotiated. In this connection, the role of the Australian Wine Research Institute as an accredited certifying laboratory will need clarification. As for exports to New Zealand, the recent request by the New Zealand wine industry for emergency protection against imports could disadvantage Australian

wine trade with its NAFTA partner should in " creased import barriers be imposed.

Despite these adverse factors total Australian exports rose by 303,000 gallons between 1970/71 and 1971/72, representing an increase of over 20%. This is accounted for by the growing

potential of such areas as the North American market which offer scope for a concerted industry approach.

In the light of all those changing circum " stances, the role of the Wine Board as the body exercising quality control over exports and spear " heading promo~ion in what are essentially new markets deserves close consideration, as does the question of the resources available to it to

carry out these tasks.

On the import side, the industry is faced with one of the consequences of a world-wide glut of wine and its by-products. Until now this has not directly affected the wine sector but in so far as the surplus is transformed into a distillation

product, the Australian brandy industry is facing powerful competition from imports into Australia as well as encountering low-priced competition in its traditional export markets. The Wine

Board, having exhausted all other available avenues, is currently seeking relief via the tariff on behalf of the domestic industry, with the active support of all sectors of the Industry.

Wine In 1971/72 Australia exported 1,7 44,554 gal " lons of wine to 74 countries compared with

1,446,528 gallons in 1970/71 . As noted earlier this growth was mainly attributable to an increase in exports to the United Kingdom but a number

of other markets shared in this increase. Total exports now stand above the average of 1,694,000 recorded over the preceding ten years. The United Kingdom regained its earlier posi " tion as the most important wine mark et for

Australia in terms of volume, accounting for 626,016 gallons in 1971/72, an increase o f ove r 36% compared with the preceding year. U nited Kingdom trade is dealt with in m ore detail in the next section of this report.

While the volume of wine exported to C anada ( 491,849 gallons) was considerably less than that to the United Kingdom, the value of expo rts to Canada was over 50% greater. More details on Canadian trade are given in a subsequen t section.

Exports to Papua/New Guinea , New Zealand, Indonesia, the United States, Japan and Fiji all showed encouraging increases, although the future of the New Zealand market is som ewhat clouded following the recent request by the N ew Zealand Industry for emergency protection against imported wine.

Of these latter markets those offerin g the best prospects for long term growth would appear to be the United States and Japan because of their large populations, relatively high an d r ising standards of living and relatively low per capita consumption of wine. Australian exporters are taking a keen interest in developmen ts in these areas which, however, remain very com petitive markets.

Further wine export statistics are set out on Pages 25 and 26 of this report.

Brandy Exports of Australian brandy recorded a further but smaller decline to 74,924 proof gallons in 1971/72. This decline is accounted for in the main by reduced exports to the C anadian

market, which in turn results in part from inten " sified price competition following progressive devaluations by South Africa.

In all, Australia exported brandy to forty-four countries. Further details may be found on Pages 25 and 26 of this report.

TRADE IN THE UNITED KINGDOM

General Australian exports to the United Kingdom showed a strong upturn in the 1971 /72 year, reversing the declining export trend evident in recent years. However the export figure can be misleading, if only because of the time w hich can elapse between exports and sa les in the country of destination.

To obtain an idea of relative perform ance in the United Kingdom market the app ropriate

Page Seven

statistics relate to clearances in the United Kingdom from bond for home consumption. These are set out in the following table:

WINE (INCLUDING SPARKLING) IMPORTED INTO U.K. AND CLEARED

FROM BOND FOR HOME CONSUMPTION

Years ended 30 June

1967-68 1968-69 1969-70 1970-71 1971-72

'000 Gallons

Australia South Africa Cyprus Other Commonwealth

Countries and Irish Republic France Portugal Spain Italy West Germany Other Foreign Countries ..

Total

1,016 2,279 3,115

32

8,967 1,976 9,943 2,696 1,361 2,745

34,130

For purposes of comparison with earlier annual reports, in 1971/72 clearances from all sources of bulk still wines amounted to 38,287,000 gallons; bottled still wines 4,553,000 and spark-1 ing wines 2,368,000 gallons.

The table shows that a strong increase in total clearances took place during 1971/72 but that clearances of Australian wine fell from the total of 498,000 gallons reached during the previous year.

The big beneficiaries from the increase in United Kingdom clearances were France, Italy, Spain, West Germany and Portugal, while Cyprus also made some headway in the market.

The imminent entry of the United Kingdom into the EEC means, as noted above, that

Australian exports, particularly of fortified wines, will in future face serious obstacles in that market. Many other competing suppliers will have privileged access to the market in one form or another whether by virtue of EEC Membership, Associate Membership or other special arrange " ments .

As pointed out earlier, the degree of disruption to established trade will depend on the conditions which can be negotiated to ensure a sufficient transition period, which will allow exporters to adjust to the changed circumstances, and reason " able administration of the regulations thereafter.

The Board will be watching developments in the un∑ ,ted Kingdom market closely and has urged the Government to do all within its power to assist in lessening the impact of these changes on the Industry.

Page Eight

804 468 498 450

2,099 1,735 1,819 1,748

3,538 3,342 4,230 4,389

28 14 39 8

9,314 8,822 9,972 12,196

2,904 2,190 2,501 2,748

10,741 10,365 12,243 13,491

2,563 3,171 4,135 5,413

1,523 1,494 1,915 2,265

1,444 1,281 1,814 2,500

34,958 32,817 39,166 45,208

Australian Wine Centre

The Australian Wine Centre is situated at 25 Frith Street in London's West End. Warehousing facilities are located at Winchester Square in the City of London.

Trade in 1971/72 continued the improvement recorded in previous years and turnover reached £72,000, an increase of £9,000 on 1970/71.

The number of bottles sold was 64,000-an increase of 8.5% over 1970/71. This is a better guide than value comparisons which can be dis " torted by inflation .

An important part of the year's trading again proved to be the business emanating from the Gift Parcel Scheme. About 70 retail stores in Australia, having accounts with the Wine Centre, accept instructions from customers wishing to send Australian wines to relatives and friends in the United Kingdom from stocks held by the Wine Centre.

The bulk of business in this sector is handled in the immediate pre-Christmas period and for Christmas 1971 5,700 parcels were sent.

The Centre has continued as the focal point of U.K. publicity, the object being to create awareness of its existence as an information centre and as a source of a comprehensive range of Australian wines. This has involved invitations to the press and wine writers as well as to

individuals likely to be interested in purchasing for personal use and boardroom entertaining.

Publicity The Board contributed $26,900 to the joint fund of the Overseas trade Publicity Committee . This fund is used to provide publicity for the products of the various Primary Industry Boards operating in the United Kingdom and provision

is made for promotional activities to be on both joint and individual bases.

TRADE IN CANADA

The prospective trade problems in the United Kingdom, as well as the setback in the domest ic market, heightens the importance to Australia of the Canadian market. The market is a highly competitive one, all trade being channelled through Provincial Liquor Boards which enjoy a

mo nopoly in their own Provinces. Before ex " porters are able to ship to any Province of

Canada it is necessary to obtain approval and listing of each particular wine or brandy from the Liquor Board concerned . Nevertheless with the strong growth of the Canadian market Australian exporters should be able to increase their ex " ports to this area.

In 1971/72 Australia exported 491,849 gallons of w ine compared with 476 ,201 gallons in the previous year. While these figures do not tell the complete story because they ignore some Austral ian exports trans-shipped to Canada they do provide an indication of trend. Since sales statistics are not published in Canada, the best available guide to Canadian demand is provided by import statistics. These show that in 1971 Canada imported 586 ,914 gallons of wine from

Australia compared with 556,870 gallons in 1970. This increase is not particularly remarkable con " sidering the fact that Canadian imports of wine from all sources rose from 6,950 ,919 in 1970 to 8,657,430 gallons in 1971 . Th is does mean that

Australia lost some market share during that period, a dangerous development from the point of view of maintaining wine listings .

A close analysis of Canadian imports shows that Australia remained the major supplier of sherry to Canada but lost this position in the dessert wine field. The major growth in the Canadian market has been concentrated in the table wine field and here it is disturbing to note

that while imports of Australian table wine into Canada rose to a total of 121 ,800 gallons in 1970 , imports for 1971 were only 104,817 gallons.

Canada remains however Australia's best ex " port market for wine in value terms as it does for brandy in both gallonage and value terms.

Australian brandy exports to Canada recorded a further fall in 1971/72 to 46 ,322 proof gallons.

Again exports cannot be equated to sales in Canada for the reasons given above. Th ere is no doubt however that while Australia rem ains one of the five main suppliers of imported brandy,

Canada is importing far more brandy than before from such sources as South Africa the U nited States and Europe. '

In part this decline in Australia's share of the Canadian brandy market can be explained by the fact of currency realignments by A ustralia's competitors. Also partly responsible is the ero " sion of tariff preferences in the C anadian m arket which Australian brandy suffered in recent yea rs.

In this connection the Board is concerned to note that Canada is proposing to o ffer special tariff preferences to developing coun tries for brandy exported to the Canadian m arket. In the

Board 's view, the low unit value recorde d in Canadian statistics for imports of bran dy from such countries as Portugal and Cyprus sh ow clearly that the proposed offer could further damage Australian brandy exports to C an ada.

The market, while very competitive, is obvi " ously a most promising one and the B oa rd spen t $(A)50,000 on promotion in Can ada in 1970/71 which with a matching contributio n from the Commonwealth Government resulted in total expend iture of about $(Can .)113,000 . This pro "

motion was aimed at conveying Australia's image as a producer of qualit y w ines. In

addition exporters had the valuable assistance of Trade Commissioners at their various po sts in Canada who worked hard throughout the yea r to support the Board 's promotional efforts.

Furthermore the Board spent $(A) 50 ,000 to encourage brand advertisers to und ertake add i " tional brand advertising and for 1972/73 has allocated a further $(A)50,000 to continue this form of support.

If Australian exporters are going to enjoy their share of the growing demand for im ported w ine and brandy, it is clear that a strong con tinuing promotional effort is required and the Board sees a need for substantial Government encou rage " ment of this effort.

OVERSEAS PUBLICITY

General In 1971/72 the Board spent a total of $140 ,513 in overseas promotion. Much of this expenditure was matched by the Commonwealth G ove rnm en t and exporters to Canada and total prom otional expenditure so generated for the year w as $276,046 .

Page N ine

The Board engages in specific promotional programmes in Canada , United K ingdom and Japan and in addition participates in such pro " m otional efforts as trade fairs and displays in all countries offering prospects for increased exports. In addition the Board co-operates with A ustralian Government Trade Commissioners in arranging Australian wine tastings in many countries.

Following the enlargement of the EEC, trad i " tional wine exports to the United Kingdom with a history of over one hundred years behind them are seriously threatened. It will simply not be possible for exporters to find new major marke ts overnight and the Industry will need substantial assistance from the Government in developing new markets to the level required for profitable ope rations.

OVERSEAS TRAVEL Mr. T. W . Hardy, Acting Chairman of the Board during the Chairman 's illness , visited Canada and the United States of America on behalf of the Board during the year.

Mr. Hardy attended the Annual Meeting of the C anadian Association of Provincial Liquor Com " missioners in W innipeg and investigated the pos sibilities for Australian w ine in the U .S.A.

EXPORT LICENCES Under Section 6 of the Wine Overseas Market " ing Act 1929 /1966 and (Licences) Regulations the following licences to export wine were issued under the authority of the Minister for Primary Industry on the recommendation of the Board for the 12 months commenc ing 1 June, 1972 :

South Australia

New South Wales

V ictoria

Western Australia

Total

30

32

14

8

84

D etails of licence holders are on Pages 17 and 18 of this report.

INSPECTION OF EXPORT WINE

In accordance with the Customs (Prohibited Exports) Re gulations the export of wine is pro " hibited if the quality is such that it would be harmful to the reputation of Australian w ine in the coun try to which it is exported.

Page Ten

Samples of each sh ipment of wine for export from Australia are exam ined by Inspectors appointed by the Wine Board .

Winemakers continue to ma intain a high

standard w ith export wine quality. Of 2.442 samples inspected during the year only 11 were rejected.

TRADE IN AUSTRALIA

Wine Overall sales of wine as recorded by official statistics remained virtually stationary during 1970 /71, a year which included the first ten and a half months of the imposition of excise on who lesale wine sales.

The prediction made in last year's Annua l Report, that 1970/71 sales growth would be below the trend line established in recent years, has been borne out. In fact sales showed a

negligible increase only, which contrasted with an average annual increase of 11.8% over the previous five years. Th is interference w ith market forces has not only endangered the

industry's immediate and short-term viability but has also had an unsettling effect on long-term industry planning. Some additional comments have already been made in an earlier section .

It is not poss ible to comment on sales levels for 1971/72 since official statistics are never available at this time of year. For that reason it is customary to deal mainly w ith the preceding year's results in this section. As far as 1971/72 results are concerned , the indications provided by preliminary clearance figures are that sales will show some recovery in 1971/72. As pointed out earlier , this recovery can not restore to the industry the level of sales it would have enjoyed in the absence of any excise.

Turning back to 1970/71, total sales rose by 0.2% above the previous year to 24,441 ,000 gallons. Of this, 342 ,174 gallons (1.4% ) were imported.

Sales of table and sparkling w ines recorded an increase of 234 ,000 gallons ( 1.9% ) in 1970 /71 to stand at 12,666,000 gallons. Sales of fortified wines declined by 179 ,000 gallons ( 1.5%) to 11 ,775 ,000 gallons over the same period.

Fortified wine sales in Australia have thus fallen below those of table and sparkling wines for two successive yea rs. The following table shows the sh ift in sales by type for selected years since 1955/56:

Year Ended 30 June

1956 (a)

1959 1962 1965 1968 1969 1970 1971

PERCENTAGE OF WHOLESALE SALES OF WINE BY TYPE

1955/56 to 1970/71 (Domestic and Imported)

Fortified

Sherry

Dessert and

Total

Flavoured

%a ge %a ge %a ge

43.2 38.1 81 .3

41.5 33.0 74 .5

42.3 29.0 71 .3

40.1 26.3 66.2

32 .7 20.4 53.1

31.3 20.2 51 .5

29 .2 19.8 49 .0

28.4 19 .8 48.2

Table and Sparkling

% age

18.7 25.5 28 .7 33 .8 46 .9 48.5 51 .0

51.8

(a) First collection Source : C .B.C .S.

Sales in 1955/56 were 10.3 million gallons and in 1970/71 24 .4 million gallons. Of the increase in sales over the period, (14.1 million gallons), fortified wine accounted for 24% and table wine 76 %.

Sales gallonages for the past five years are shown in the following table:

WHOLESALE SALES OF WINE

(Domestic and Imported)

TABLE AND SPARKLING WINES

Dry Red

Rose

Dry White

Sweet White

Sparkling

SHERRY, DESSERT AND

FLAVOURED WINES

1966/67

3,222

121

1,902

492

1,701

7,438

Sweet White 4,917

Sweet Red .... 3,312

Dry White 1,310

Cocktails and Vermouths 577

10,116

TOTAL ALL WINES .... .... . ... 17,554

1967/68 1968/69

'000 Gallons

4,257 4,933

226 424

2,282 2,626

559 556

1,979 2,161

9,303 10,700

5,154 5,583

3,343 3,602

1,321 1,317

701 835

10,519 11 ,337

19 ,822 22,037

1969/70 1970 /71

5,661 5,552

552 631

3,085 3,285

606 545

2,528 2,653

12,432 12,666

5,775 5,618

3,851 3,78 2

1,349 1,318

979 1,057

11 ,954 11 ,775

24,386 24 ,441

Source : C .B.C .S.

Page Eleven

Movement in total wine consumption and share of the market held by each type are illustrated by the following graphs:

14

12

10

6

4

2

14

12

10

Wholesale Sales of Sherry, Dessert and Flavoured Wines Sweet White (Domestic and Imported)

Sweet Red

Unit: Millions of Gallons.

D Dry White Cocktails & Vermouths

Year ending 30th June. Source: Commonw ealth Bureau of Cens us & Statist ics.

Wholesale Sales of Table Wines

Dry Red

(Domest ic an d Imported)

D DryWhite Unit: Millions of Gallons.

Other (until 30.6.65)

II Rose } ∑ . from m Sp arkling 1.?.65 Sweet White

1956 1957 1958 1959 1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971

Year end ing 30th June . S ou rce: C ommonwealth B urea u of Census & S tatistics.

14

12

10

8

4

14

12

10

Per capita consumption of wine in Australia is still low when measured against other com " pa rab le countries. Industry's expectations have been that per capita consumption would show a regular increase. Following the introduction of excise, however , it is noteworthy that sales did no t keep pace with the population increase, falling from 1.96 to 1.92 gallons per head between 1969 /70 and 1970/71.

Brandy Austral i an brandy cleared for home consump " tion rose from 1,179,000 proof gallons in 1970/71 to 1,250 ,000 proof gallons in 1971/72, based on

preliminary figures for 1971/72.

Wholesale sales of brandy (including 17.5%

'000 PROOF GALLONS 2000

Clearances of Brandy (Dom estic an d Impor ted )

" Impo rted

D Dome stic

1500

1000

500

imported) in 1970 /71 we re 1, 563 ,000 proof gal " lons comp ared with 1,495 ,000 proof gallons in 1969/70. Sales stati stics for 1971 /72 are not yet available but the indication from clea rance figures is that 1971/72 sales will be higher than

1970/71 .

While clearances of Australian brandy in∑ creased in 1971/72 the Board has b ecom e

particularly concerned at the threat pose d by the grow ing market share being gained b y

cheap imported brandy, and has accordingly sought a measure of protection against su ch imports. The following graphs illu strate the growth in brandy sales and clearances since

1959 /60 as w ell as indicating the growth of import compet ition.

'000 PROOF GALLONS 2000

500

Wholesale Sales of Brandy (D om estic and Imported)

" Im ported

D Do m estic

200<1

1500

1000

500

Year end ing 30th June. Source: C ommonwealth B ureau of Census & Statistics.

PUBLICITY IN AUSTRALIA

General In 1971/72 the Board allocated $350 ,000 for national w ine and brandy promotion in Australia. The money allocated tor a particular year is not necessarily spent during the fiscal year since, for financial reasons, the advertising year com " mences 1 October. Thus , although $39 ,665

allocated tor advertising w as n ot spent by 30 June , 1972 this is needed to m eet com mitments up to 30 Se ptem ber, 1972.

The national promo tion programm e is adm in " istered by the Board's National Prom otions Committ ee made up of the Boa rd's Executive Committee and five members nominated by the Federal Wine and B randy Producers' C ou ncil of Australia.

Page Thirteen

During 1971/72 the Board conducted two national advertising campaigns, details of which are set out below:

Flagon Wine A national campa ign to promote flagon wines was organised for 1971/72. The pro " gramme consisted of advertisements in national magazines and on public transport w ith the slogan "The Ten Cent Extravagance". The campa ign commenced in October, 1971 and will continue for 12 months from that date.

Wine Excise Wine and Brandy Producers' Associations in all States gave an undertaking to the M inister for Primary Industry that the reduction in excise would be passed on in total by all their members . Consequently, when the Common " wealth Government reduced wine excise from SOc to 25c per gallon on 25 May, 1972, a

campaign w ith the theme "Wine Prices Down" was conducted in the press and on radio.

It is worth recording that the Board ran a white wine promotional campaign in 1970/71. The campaign coincided with the introduction of wine excise. Wholesale sales details now avail " able suggest that the campaign was worthwhile in that while sales of still red wine fell from 5,661 ,000 to 5,552 ,000 gallons between 1969/70 and 1970/71, sales of still white wines supported by the campaign rose from 3,691 ,000 to 3,830,000 gallons during the same period.

WINE AND BRANDY

PRODUCERS' ASSOCIATIONS Each year the Board grants funds to Wine and Brandy Producers' Associations in each State to assist the promotional work carried out by State Wine Information Bureaux , along policy lines decided by the National Promotions Com " mittee.

Wine Information Bureaux are the publicity sections of the Associations. They provide wine advisory services, conduct public relations activities, wine tastings, spec ial promotions and w ine tasting courses for public and retail trade.

BOOKLETS Publicity booklets in use were not changed during the year and current booklets are:

" "Your Australian Wines"- a general know " ledge booklet on wine types and use of wine.

" "Bacchus in the Kitchen-Bacchus at the Bar"-a selection of wine recipes for food and mixed drinks.

Page Fourteen

" "Australian Brandy"-a booklet explaining brandy production.

" "Australia's Flourishing Vine"-a booklet explaining grape-growing and winemaking produced as a background for school projects.

WINE RECIPE SERVICE

The Wine Recipe Service regularly issues "Cooking With Wine " recipes to metropolitan and country newspapers, magazines , radio and tele " vision stations, as well as other organisations interested in the use of wine in cooking.

The number of recipes issued during the year was up considerably on the previous year and the number used by the media showed a marked increase.

PUBLICATIONS

The Board has reprinted the following books for sale:

" "Bacterial Spoilage of Fortified Wines" J. C . M. Fornachon (Second Edition) $2.00

" "Studies on the Sherry Flor'' J. C . M. Fornachon (Second Edition) $2.00 (Prices include postage)

"Wine for Profit " was produced by the Board in 1968 as a handbook for the retail trade. It is still for sale but only to persons connected with the trade and students doing wine training courses.

THE AUSTRALIAN WINE RESEARCH INSTITUTE

The Wine Research Act 1955 provides that the Australian Wine Board shall contribute not Jess than $8,000 each year to The Australian Wine Research Institute .

The Board increased its grant to $52,500 for 1971/72 from $50,000 in 1970/71.

The Board 's representatives on the Council of the Institute are:

Messrs I. H . Seppelt, 0. B.E. (ex-officio)

T. W . Hardy

R. R. Hollick

The Board notes that the Institute , owing to the nature of its incorporation , is subject to sales tax and import duties on purchases of equip " ment and supplies even though Government funds are involved. The Board considers that this drain on available resources reduces the ab ility of the Institute to assist the Industry.

OENOLOGY SCHOLARSHIP In 1970 the Wine Board granted three students two year scholarships in oenology at the Agricul " tural College, Roseworthy, South Australia. These students completed their course in 1971.

The Board has decided not to continue the scholarships as Roseworthy students now receive Commonwealth Scholarships or are sponsored by winemakers .

Consideration w ill be given to granting a post graduate travel scholarship to an oenologist in 1973/74.

COMMONWEALTH GRAPE

ADVISORY COMMITTEE The Commonwealth Grape Advisory Com "

m ittee was formed by the Australian Agricultural Council in 1970 to work towards a stabilization plan for the Industry.

The Committee met on two occasions during the year and the Board was represented by the General Manager. The Committee expects

shortly to be in a position to make firm recom " mendations to the Agricultural Council on measures designed to promote stabilization of the Industry.

SUB-STANDARD DRIED GRAPES Dried grapes which are not up to standard for retail purposes in the dried fruits industry may be used for distillation of grape spirit under special circumstances subject to the approval of the M inister for Customs and Excise.

As grape spirit stocks were at a very high level at 30 June, 1971 the Board recommended

Publicity in Australia

Publicity Overseas and Export Services

Administration

Research and Scholarships ....

Meeting Expenses ....

Tariff Board Inquiry-Brandy

COMPOSITION OF THE BOARD

In February, 1971, Mr. I. H . Seppelt, O .B.E ., was elected Chairman of the Board for his

fifteenth successive year.

Mr. R. S. Swift, O.B.E . was appointed Com " monwealth Government Representative on 30

to the M inister that sub-standard dried grapes from the 1971 pack should not be released for distillation .

The Minister did not approve the release of this fruit.

FINANCE Although the rate of levy wa s increase d for the 1971 vintage, levy income was down $22,000 due to a reduced vintage tonnage. As noted under the section dealing with rate of levy, the lack of predictability of the Bo ard's incom e hampers the efficiency of its operations. An other inherent problem in the present system is the difficulty involved in forecasting the industry's needs twelve to twenty-four mon ths ahead.

One disadvantage which the B oard works under is the fact that it is I iable to pay sales tax on some of its purchases, despite its status as a Commonwealth Government instrumentality. This increases costs and reduces its ability to ass ist the industry.

Expenditure was $5,000 more than the previous year and exceeded income by $94,000 . Expe n " diture has exceeded income each of the last three years and Accumu lated Fun ds and Re " serves have been reduced over this pe riod from $210,000 to $50,000. The Bo ard has found that this amount is inadequate and that urgent action

must be taken to establish reasonable reserves.

Financial statements for the year are on Pa ges 19 and 20 of this report.

Items of expenditure over the last three years expressed as a percentage of total expenditure are:

1969/70 1970/71 1971 /72

%age %age % age

63.4 58.7 50.5

18.9 19.7 23.7

10.8 10.2 11 .8

3.5 8.4 8.7

3.4 3.0 3.1

Nil Nil 2.2

September , 1971 , taking the place of Mr. A. L. Senger, O .B.E. who had served on the Board for 13 years.

Full details of membersh ip a nd orga nisation represented are on Page 1 of this report.

Page Fifteen

Mr. I. H . Seppelt underwent surgery during the year. Mr. T. W. Hardy was appointed Acting Chairman for the period of Mr. Seppelt's illness.

MR. 0. S. SEMMLER It is with regret that the Board records the death of Oscar Samuel Semmler on 26 April,

1972.

Mr. Semmler had been a Co-operative Winery Asso ciation Member of the Board for just over two years. He was a man of vision and energy

and contributed much to the well being of the Wine Industry.

No replacement member had been appointed as at 30 June, 1972.

MEETINGS The Board met four times during the year in Adelaide, Melbourne, Mildura and Perth.

When in Mildura the Board took the oppor " tunity of inspecting developmental work on trellising at the lrymple property of Mr. R. R. Hollick and also inspected C.S.I.R.O. vineyards an d laboratories in the area.

The Executive Committee met on ten

occasions.

The membership of the Board's Executive Committee is Messrs. I. H. Seppelt, O.B .E. (ex " officio), A. D . Preece , E. W. W . Peatt, K. D . Reid, and C. G. Tunbridge.

STAFF The year under review has been a very busy one for the staff and the Board expresses its appreciation of their efficient service.

After seventeen years of outstanding service Mr. H . F . M . Palmer resigned as General Manager of the Board on 31 May, 1972.

At the Perth Board Meeting industry leaders paid tribute to the loyal and efficient service given by Mr. Palmer and the great contribution he had made to the progress of the Australian ∑ Wine and Brandy Industry.

Mr. A . M. Landgren was appointed General Manager of the Board on 1 June, 1972. The Board also records its appreciation of the work done by the staff of the Australian Wine Centre, London .

APPRECIATION The Board is most appreciative of the services, assistance and co-operation received from the following Commonwealth Government Depart " ments during the year:

Department of Primary Industry Department of Trade and Industry

Page Sixteen

Department of Customs and Excise Bureau of Census and Statistics Attorney General's Depar tment Auditor-General's Office.

The Board received a great deal of valuable assistance, particularly in wine promotion, from Australian Government Trade Commissioners throughout the year.

The Board also wishes to thank the following Industry organisations for their co-operation during the year: Federal Wine and Brandy Producers' Council of

Australia Incorporated Federal Grapegrowers' Council of Australia Wine and Brandy Producers' organisations in each State W ine and Brandy Co-operative Producers' Asso "

ciation of Australia Incorporated

The Australian Wine Research Institute Australian Wine and Spirit Association (Great Britain) .

STATISTICS Tables showing details of production, clear " ances, exports and stocks (upon which duty has not been paid) are attached to this report as follows:

Part Production

Part II Clearances, Revenue and Fortifying

Part Ill

Part IV

Spirit used

Exports

Stocks (upon which duty has not been paid) (Previous Stocks in Bond)

The Board is very grateful to the Common " wealth Bureau of Census and Statistics and the Department of Customs and Excise for collecting the information in the following tables.

Signed: IAN H. SEPPEL T,

Chairman, Australian Wine Board.

Adelaide,

2 October, 1972.

LICENSED WINE EXPORTERS For Twelve Months Commencing 1 June, 1972

COMPANY

South Australia

Angove 's Pty. Ltd.

Australian Wines Pty. Ltd. Barossa Co -op . Winery Ltd. Berri Co -op. Winery & Disty. Ltd. Chateau Yaldara Pty. Ltd.

Clarevale Co-op. Winery Ltd.

Co -operative Wines (Aust.) Ltd. d'Arenberg Wines Pty. Ltd. The Emu Wine Co. Pty. Ltd. Hamilton's Ewell Vineyards Pty. Ltd. Thomas Hardy & Sons Pty. Ltd. John Harvey & Sons (Aust.) Pty. Ltd.

Horndale Distillery Pty. Ltd.

Kies Pty. Ltd. Loxton Co -op . Winery & Dist. Ltd. Manresa Society Incorporated H. M . Martin & Son Pty. Ltd.

Masero & Co . Pty. Ltd. Renmark Growers Disty. Ltd.

Walter Reynell & Sons Wines Pty. Ltd. W. Salter & Son Pty. Ltd.

Seav iew Winery Pty. Ltd.

B. Seppelt & Sons Ltd.

S. Smith & Sons Pty. Ltd.

Southern Vales Co-op. Winery Ltd. St. Hallett's Wines The Stanley Wine Co. Pty. Ltd.

Tolley, Scott & Tolley Ltd. Waikerie Co-op. Disty. Ltd. Woodley Wines Pty. Ltd.

Western Australia

Benson 's Distributors Pty. Ltd. The D istillers Agency Ltd.

Fremantle Providoring Co. Pty. Ltd. Johnson Harper Pty. Ltd. Lionel Samson & Sons Pty. Ltd. Oceania Trading Exchange

Sandalford Wines Pty. Ltd. Valencia Vineyards Pty. Ltd.

ADDRESS

P.O. Box 12, Renmark . 5341 The Parade , Magill. 5072 P.O. Box 21 , Nuriootpa. 5355 P.O. Box 226, Berri. 5343 P.O . Box 62 , Lyndoch . 5351

15 Lennon Street, Clare. 5453

Morphett Vale. 5162 P.O. Box 16, Mclaren Vale. 5171 Morphett Vale. 5162 P.O. Box 169 , Glenelg. 5045

2-8 Henley Beach Road, Mile End . 5031 27 Gresham Street, Adelaide. 5000 Mclaren Vale. 5171 P.O. Box 4, Lyndoch. 5351 P.O . Box 2, Loxton. 5333

Sevenhill. 5450 Stonyfell Road, Stonyfell. 5066 6 Bowker Street, Somerton Park. 5044 P.O. Box 31, Renmark. 5341

Reynell Road, Reynella. 5161 Stonyfell Road , Stonyfell. 5066 Reynell Road , Reynella. 5161 27 Gresham Street, Adelaide. 5000 P.O . Box 10, Angaston . 5353 Mclaren Vale. 5171

P.O. Box 120, Tanunda . 5352 P.O. Box 6, Clare. 5453

42 Nelson Street, St. Peters. 5069 P.O . Box 54, Waikerie. 5330 P.O. Box 50, Glen Osmond. 5064

162 Wellington Street, Perth. 6000 32 Mounts Bay Road , Perth. 6000 7 Leake Street, Fremantle. 6160 176 Sutherland Street, West Perth. 6005 31 Cliff Street, Fremantle. 6160

27 Arundel Street, Fremantle. 6160

West Swan . 6055 P.O. Box 13, Gu ildford. 6055

Page Seve nteen

LICENSED WINE EXPORTERS

COMPA N Y ADDRESS

New South Wales

Bodega W ines Pty. Ltd. P.O. Box 1, Pyrmont. 2009

Leo Suring Pty. Ltd. 9-15 Carlotta Street, Artarmon . 2064

Craig, M ostyn & Co . Pty. Ltd. 212 -218 North York Street, Syd ney. 2000

Crawfo rd & Co . (A'asia} Pty. Ltd. 356a Eas tern Valley W ay, Chatswood . 2067

Distillerie S tock (A'asia} Pty. Ltd. 51 Hotham Parade , Artarmon. 2064 Pe ter Dolye & Sons Pty. Ltd. 3-5 Market Street, Newc astle. 2300

Fes q & Co. Pty. Ltd. 193 Gloucester Street, Sydney. 2000

M . Fiorelli Pty. Ltd. 106 Commonwealth Street, Surrey Hills. 2010

Francesco C inzano & C ia (Aust.) Pty. Ltd. 674 Botany Road , Alexandria. 2015 G arrod & Rob erts Pty. Ltd. 290 Castle Hill Road, Cas tle Hill. 2154

Gilbeys Australia Pty. Ltd. 26-32 Pyrmont Bridge Road, Pyrmont. 2009

International Cellars Pty. Ltd. P.O. Box 371, North Sydney. 2060

J. Jarm an Liquor Supplies Pty. Ltd. 156 New South Head Road, Edgecliff . 2027 F. & N . K assel Pty. Ltd. 697 Princes Highway , Tempe. 2044

Kent Traders Pty. Ltd. 1743 Botany Road, Botany. 2064

D ouglas L. Lamb Pty. Ltd. 55 Dickson Avenue , A rtarmon. 2064

Lindemans W ines Pty. Ltd. 6 Carrington Road , Marrickville. 2204

M iranda W ines Pty. Ltd. Griffith. 2680

M ontrose W ines & Spirits Pty. Ltd. 43 Briggs Street, Camperdown . 2050

Mc W illiams Wines Pty. Ltd. P.O . Box 1, Pyrmon t. 2009

N .W .S.D.A. Pty. Ltd. P.O . Bo x 1, Pyrmont. 2009

Penfo lds Wines Pty. Ltd. P.O . Box 38 , St. Peters. 2044

Reckitt C olman Exports 44 Wharf Ro ad, West Ryde. 2114

Reed Estates Wines Pty. Ltd. 53 Victoria Avenu e, Chatswood. 2067

R hine Castle Wines Pty. Ltd. 7 Little Bourke Street, Darlinghurst. 2010

Sw ift & Moore Pty. Ltd. 149-155 Milton Street, Ashfield. 2131

W. S. Tail & Co. Pty. Ltd. 31 Macquarie Place, Sydney . 2000

W illiam s Marketing Corp. Pty. Ltd. 56 Young Street, Sydney . 2000

W ill iams on Gerard (A'asia} Pty. Ltd. 211 -219 Bulwara Road, Pyrmont. 2009 John W oo ds & Co . Pty. Ltd. 388 Sussex Street, Sydney , 2000

W ine & Brandy Producers' Assoc iation of N .S.W . 307 Pitt Street, Sydney . 2000 The Australian Wine Consumers Co-op . Society Ltd.40 King Street, Sydney. 2000

Victoria

A lexander & Paterson A ustral Wine & Spirit Co. Pty. Ltd C . & E. Baitz Pty. Ltd. Dora do Distributors Pty. Ltd. Masso ni Wine Co . Pty. Ltd. Mildara Wines Ltd. Nathan & Wyeth Pty. Ltd. Q uelltaler Wines Ltd. W . J. Seabrook & Son Pty. Ltd. Stephe n King Pty. Ltd. Tahbilk Pty. Ltd. Toze r Kemsley & Millbourne (A'asia) Pty. Ltd. S. Wynn & Co. (Export) Pty. Ltd. G . Sutherland Smith & Sons

Page E igh teen

195 Queensberry Street, Carlton. 3053 22 Bosisto Street, Richmond. 3121 74-78 Ricketts Road , Mount Waverley. 3149 663 -665 Lygon Street, North Carlton. 3054 56-62 Little Bourke Street, Melbourne . 3000 P.O . Bo x 55 , M erbein. 3505 120-130 Queens Parade , North Fitzroy. 3068 120-130 Queens Parade , North Fitzroy. 3068 573 Lonsdale Street, Melbourne. 3000 60 Langridge Street, Collingwood . 3066 Chateau Tahb ilk, Tabilk. 3607 316 Queen Street, Melbourne. 3000 348 St. Kilda Road, Melbourne . 3004 508 Queensberry Street, North Melbourne. 3051

AUSTRALIAN WINE BOARD

(Wine Overseas Marketing Act 1929-1966)

STATEMENT OF INCOME AND EXPENDITURE FOR TWELVE MONTHS ENDED

30 JUNE, 1972

1970/71 1971/72

$ $ $ $ $

INCOME

534 ,366 Wine Grape Levy 512 ,597

4,740 Interest .... 2,227

1,552 Other Income 3,315

540,658 TOTAL INCOME 518,139

EXPENDITURE PUBLICITY IN AUSTRALIA 356,082 National Promotions Campaign 308 ,823

PUBL ∑ ICITY OVERSEAS

11,640 Australian W ine Centre 4,473

26,900 United Kingdom 26,900

66,865 Canada .... 100,507

2,000 Japan 2,000

4,855 Other Areas 6,633

112,260 140,513

EXPORT SERVICES

1,277 Export Wine Inspections 1,615

6,119 Overseas Travel 2,602

7,396 4,217

RESEARCH

50,000 Australian Wine Research Institute 52 ,500

MISCELLANEOUS EXPENSES

1,060 Oenology Scholarship 952

2,922 Fees and Travelling Expenses 2,702

3,087 Public Relations 4,298

Tariff Board Inquiry 13,333

7,069 21 ,285

BOARD MEMBERS

5,030 Sitting Fees 5,770

4,046 Travelling Expenses 3,447

5,956 Fares 7,077

260 Travel Insurance 275

15,292 16,569

STAFF

30 ,329 Salaries ... .... 35,296

4,217 Travelling, Car and Other Expenses ... 6,628

5,851 Superannuation-Board's Liability 5,643

3,090 Provision for Long Service Leave 1,460

43 ,487 49 ,027

OPERATING EXPENSES

4,259 Rent and Lighting 4,221

3,672 Postage , Freight and Telephone 4,262

3,176 Printing and Stationery 3,357

1,625 Depreciation 1,553

2,222 General Expenses 4,700

381 Payroll Tax 639

15,335 18,732

606 ,921 TOTAL EXPENDITURE 611 ,666

Excess of Expenditure over Income transferred to $93 ,527 $66 ,263 Accumulated Funds

Page Nineteen

AUSTRALIAN WINE BOARD

(Wine Overseas Marketing Act 1929-1966)

BALANCE SHEET AS AT 30 JUNE, 1972

30 June, 1971 $ $ $

109 ,762 44,000

7,715

2

194

97,690 24 ,477

19,982

153 ,762

ACCUMULATED FUNDS AND RESERVES

ACCUMULATED FUNDS

Balance as at 30 June, 1971 ....

Add-Transfer from General Reserve

66 ,263 Less-Excess of Expenditure over Income ....

87,499 Accumulated Funds as at 30 June, 1972 56 ,000 RESERVE FUNDS TOTAL ACCUMULATED FUNDS

$143,499 AND RESERVES ....

which are represented by " FIXED ASSETS Furniture, Equipment and Motor Vehicles (at cost) .... Less-Provision for Depreciation

Establishment Costs ....

Less-Amount Written Off

7,717 TOTAL FIXED ASSETS ....

INVESTMENTS

18,375 12 ,252

3,900 3,898

29 ,819 Shares in Australian Fine Wines Limited (at cost) .... CURRENT ASSETS Cash in Hand ... .

Cash at Bank ... .

Stock-Wine Centre (at cost) D ebtors Less-Provision for Doubtful Debts

142 ,343 TOTAL CURRENT ASSETS

179 ,879 TOTAL ASSETS

LONG TERM LiABILITIES

10,665 Provision for Long Service Leave CURRENT LIABILITIES 25 ,715 Creditors

36,380 TOTAL LIABILITIES

13,038 321

Excess of Assets over Liabilities which equals $143,499 Accumulated Funds and Reserves above -- -Note: Contingent Liabilities for National Promot ions Campa ign in Australia for the year ending

30 September , 1972 , amounts to $39 ,665 .

30 June, 1972 $ $

87 ,499 56 ,000

6,123

2

194

43,165 29 ,800

12 ,717

2,680

69 ,168

143 ,499 93 ,527

49 ,972 Nil

$49 ,972

6,125

29 ,81 9

85 ,876

121 ,820

71,848

$49 ,972

I. H . SEPPEL T, Chairman A . M . LANDGREN , General Manager

The above Balance Sheet and accompanying Statement of Income and Expenditure have been examin ed and are in agreemen t w ith the accoun ts. In my opinion, they show fairly the financial opera " tions for the year ended 30 June , 1972 and the state of affairs of the Australian Wine Board as at that date.

Page Twenty

J. K . LAWRENCE,

ACTING AUDITOR GENERAL FOR THE COMMONWEALTH

26 September, 1972

AUSTRALIAN STATISTICS

PART I. PRODUCTION

TOTAL WINE PRODUCTION (b) - INCLUDING WINE FOR DISTILLATION

(Revised 1972)

Year Ended

Sth. Aust. N .S .W . Vic. W. Aust. 30 June

'000 Gallons

1963 20 ,785 5,858 2,433 838

1964 27 ,102 6,030 3,705 949

1965 28,022 6,404 3,656 813

1966 23,885 6,439 3,151 842

1967 29,324 7,893 3,555 924

1968 30,055 8,350 5,180 828

1969 36,070 8,597 6,241 1,056

1970 43 ,301 11 ,529 7,251 1,015

1971 37 ,233 10,376 6,616 999

1972 (a) 39 ,922 13,735 7,354 879

(a) Preliminary (b) Excludes added grape spirit.

Year Er.jed 30 June

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972 (a)

(a) Preliminary

BEVERAGE WINE PRODUCTION (Revised

Table Wines (Including Sparkling)

1972)

Sherry, Dessert and Flavoured Wines (b)

'000 Gallons

6,091 8,761

7,874 10,825

8,697 11 '137

8,663 9,678

12 ,020 12,401

14,562 11 ,534

15,960 12,059

19,814 13,736

17,831 12 ,257

21 ,093 11 ,943

(b) Includes added grape spirit.

" Abbreviations used in this section: C .B .C .S. - Commonwealth Bureau of Census and Statistics C . & E. - Commonwealth Department of Customs and Excise.

Q'land C'wealth

28 29 ,942

33 37 ,819

24 38 ,919

24 34,341

38 41 ,734

31 44 ,444

31 51 ,995

31 63,127

33 55,257

30 61 ,920

Source: C .B.C .S.*

Total

14 ,852

18,699

19 ,834

18,341

24,421

26 ,096

28 ,01 9

33 ,550

30 ,088

33,036

Source: C. B. C .S. *

Page Twen ty-one

AUSTRALIAN STATISTICS

PA RT I. PRODUCTION (continued)

Ye ar Ended 30 June

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972 {a)

{a) Prelim inary

Year Ended 30 June

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972 {a)

Sth. A ust.

1,759

2,130

2,151

1,968

2,435

2,385

2,569

3,268

2,792

2,877

{a) P reliminary

Page Twenty-two

STANDARD BR ANDY PRO D U CTION

(R evised 1972)

Sth. Aust.

N .S.W. and Victoria

'000 P roof Gallons

994 135

1,053 167

1,183 217

1,167 204

651 140

715 157

848 220

1,140 118

1,347 136

1,451 182

FORTIFYING SPI R IT PROD U C TION

(Revised 1972)

N .S .W. V ic.

'000 Proof Gallons

61 1 251

569 271

586 259

617 188

534 361

597 536

677 630

713 870

585 623

1,490 649

C 'wealth

1 '129

1,220

1,400

1,371

791

872

1,068

1,258

1,483

1,633

Source: C.B .C.S.

W. Aust. C 'wea lth

60 2,681

62 3,032

38 3,034

53 2,826

57 3,387

40 3,558

38 3,914

51 4,902

36 4,036

49 5,065

Source: C.B .C .S.

AUSTRALIAN STATISTICS PART II.

CL'EARANCES, REVENUE AND FORTIFYING SPIRIT USED

CLEARANCES OF AUSTRALIAN WINE FROM BOND FOR HOME CONSUMPTION (a)

Year Ended Sth. Aust. N.S.W . Vic. w. Aust. Q'land Tas . A .C .T. C'we alth 30 June & N.T. '000 Gallons 1971 (a) 6,618 6,974 3,147 1,013 556 144 46 18,498

1972 (b) 8,485 9,182 3,987 1,320 765 158 75 23,97 2

Source: C.B .C .S.

(a) Incomplete year.-Excise duty was imposed on all wine commencing 18 Augu st, 1970 . 1970/71 clearances are for period 18 August, 1970 to 30 June, 1971. (b) Preliminary.

Year Ended 30 June

1963

1964

1965

1966

1967

1968

1969

1970

1971

CLEARANCES OF AUSTRALIAN FORTIFIED WINE FROM BOND

FOR HOME CONSUMPTION

Sth. Aust. N.S.W. Vic. W . Aust. Q'land

'000 Gallons

5,555 1,838 1,428 227 17

5,821 1,786 1,723 206 13

5,713 1,835 1,875 221 7

6,060 1,521 1,921 206 10

6,162 2,564 2,125 235 9

7,195 2,771 2,204 249 17

7,025 2,903 2,249 202

6,870 3,348 2,177 200

171 118 46 4

Note: Fortified Wine included with wine (above) from 18 August, 1970. 1970/71 clearances are for period 1 July, 1970 to 17 August, 1970 .

C 'wealth

9,06 5

9,54 9

9,651

9,71 8

11 ,09 5

12,436

12 ,379

12 ,596

339

Source: C .

CLEARANCES OF AUSTRALIAN BRANDY FROM BOND FOR HOME CONSUMPTION

(Revised 1972)

Year Ended Sth. Aust. N.S .W. Vic. W. Aust. Q'land Tas . A.C.T. C'we alth 30 June & N .T. '000 Proof Gallons

1963 193 352 213 48 63 14 883

1964 213 356 228 50 67 14 928

1965 268 355 249 54 68 15 1,009

1966 269 338 218 56 62 12 955

1967 250 350 224 57 63 14 958

1968 288 375 261 66 64 13 1,068

1969 311 326 254 75 63 13 2 1,04 4

1970 360 361 266 83 72 10 2 1,154

1971 402 342 261 85 76 12 2 1,180

1972 (a) 446 340 278 96 77 11 2 1,250

(a) Preliminary Source : C .B.C .S .

& E.

Page Twenty-three

AUSTRALIAN STATISTICS

PART II.

CLEARANCES, REVENUE AND FORTIFYING SPIRIT USED

(continued)

REVENUE FROM EXCISE DUTIES

Year Ended Wine (b) Wine Sp irit Brandy Total 30 June

$ $ $ $

1963 887 ,040 4,325 ,390 5,212 ,430

1964 898,872 4,547,934 5,446,806

1965 873 ,924 4,946,004 5,819 ,928

1966 878 ,190 6,498,956 7,377 ,146

1967 987,520 7,663,213 8,650,733

1968 1,106,514 8,538,946 9,645 ,460

1969 1,118,640 8,346 ,419 9,465,059

1970 1,274 ,362 9,226 ,602 10,500 ,964

1971 9,250,034 251 ,543 (c) 9,430,901 18,932,478

1972 {a) 11 ,528,951 9,994,940 21 ,523 ,891

(a) Preliminary Source: C. & E.

(b) Excise Duty of SOc per gallon imposed on grape wine commencing 18 August, 1970 reduced to 25c per gallon May , 1972.

(c) Period 1 July, 1970 to 17 August, 1970. Wine Spirit subject to duty from 18 August, and included with wine.

Year Ended 30 June

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972 (b)

Sth. Aust.

1,602

1,732

1,865

1,683

2,047

2,096

2,346

2,743

2,140

2,202

FORTIFYING SPIRIT USED (Revised 1972)

N.S.W. Vic.

'000 Proof Gallons

605 228

626 298

649 328

488 254

824 295

606 585

654 397

903 449

900 419

981 693

W. Au st. &

Q'lan d (a)

78

60

48

53

62

43

51

55

50

47

C'w ealth

2,513

2,716

2,890

2,478

3,228

3,330

3,448

4,15 0

3,509

3,923

{a) Only a small amount of fortifying spirit is used in Queensland . Source: C .B.C .S. {b) Preliminary.

Pa ge Tw enty-four

AUSTRALIAN STATISTICS

PART Ill. EXPORTS

EXPORTS OF WINE TO MAIN MARKETS

(Revised 1972)

Year Ended United

Canada New Papua & Other Total 30 June Kingdom Zealand New Guinea Des tinations Expo rts

'000 Gallons

1963 1,102 287 79 20 123 1,611

1964 1,054 218 59 23 183 1,537

1965 1,415 298 79 24 181 1,997

1966 1,250 382 79 42 204 1,957

1967 1,055 371 81 57 214 1,778

1968 1,041 413 116 71 205 1,846

1969 1,003 435 91 86 190 1,805

1970 448 467 92 86 203 1,296

1971 458 476 92 182 239 1,447

1972 626 492 123 182 322 1,745

Source: C .B .C .S.

EXPORTS OF BRANDY TO MAIN MARKETS

(Revised 1972)

Year En ded United

C anada New Malaysia & Other

Total

30 June Kingdom Zealand Singapore Des tinations Exports

Proof Gallons

1963 360 70 .278 1,270 29 ,984 11 ,352 113 ,244

1964 2,233 54 ,032 1,540 29,120 18,959 105 ,884

1965 7,318 62 ,316 526 26 ,275 19,644 116 ,079

1966 3,391 72 ,732 549 26 ,055 15,059 117 ,786

1967 2,014 77 ,123 2,615 20 ,718 19,612 122 ,082

19 68 1,390 56 ,802 3,300 17,655 13,666 92,813

1969 3,224 57 ,463 3,689 17,770 15,853 97 ,999

1970 1,399 70,145 544 17,639 17,346 107 ,07 3

1971 741 51,556 909 11 '146 17,403 81,755

1972 1,485 46 ,322 748 9,357 17,012 74 ,924

Source: C .B .C .S.

Pa ge Twen ty-five

EXPORTS OF AUSTRALIAN WINE FOR YEAR ENDED 30 JUNE , 1972 (G AL LONS)

COUNTRIES OF DESTINATION

United Can ada Papua & New Hong Kong Singapore Japan U.S.A . WI N E Kingdom N ew Guinea Ze aland

Sparkling and Pearl Wine 2,016 21 ,600 13 ,059 19,145 1,059 7,358 284 316

Still W ine, containing 27 % proof spirit or less: Bottled .... ... .... .... 18,216 138 ,023 102,361 82,846 16,376 17,941 7,069 35 ,462

Bulk .... ... .... . ... 336 ,074 - 1,102 269 9,529 4,175 660 -

Still Wine, containing over 27 % proof spirit: Bottled .... .... .... ... 7,003 111 ,522 65 ,155 5,142 3,987 3,447 2,330 2,412

Bulk .... ... .... .... 262 ,707 22 0,704 44 15,723 30,245 454 - -

Totals- Gallons .... ... , 626 ,016 491 ,849 181,721 123,125 61 ,196 33,375 10,343 38,190

Value - $A ... . ... 888 ,946 1,343 ,511 623,064 386,754 129,408 129,684 29,731 157 ,874

Othe r

Destinations

11,903

67 ,826 30,384

32 ,074 36 ,552

178 ,739 528 ,757

EXPO RTS O F AUSTRALIAN BRAND Y FOR YEAR END ED 30 JUNE , 1972 (PR OO F G ALLO N S)

COUNTRIES O F D ESTINATIO N

I Papua & United N ew O ther B RA N DY Canada Singapore N ew Guinea Malaysia Fiji Ho ng Kong Kingdom Ze aland Destinations

Bottled ... ... . . .. .... 28 ,088 5,671 7,566 3,686 3,886 923 910 210 3,553

Bulk . .. .... .. .. 18,314 - 180 - 357 394 575 538 153

- ∑

Totals- Gallons .... .... 46 ,322 5,671 7,746 3,686 4,243 1,317 1,48 5 748 3,706

V alue-$A .... .... 232 ,227 37 ,363 48 ,187 26,537 22,815 5,670 8,336 2,895 23,115

- -- -

T otal Ex ports

76,74!

486 ,12 382 ,19

233 ,07 566,42 2

9

1,744 ,55< 4 9 4,217 ,72!

T otal Exp o rts

54 ,413 20 ,511

74 ,92 < 407 ,14 ! 4

5

Source: C.B .C .S.

AUSTRALIAN STATISTICS

PART IV. STOCKS UPON WHICH DUTY HAS NOT BEEN PAID

AUSTRALIAN TABLE AND SPARKLING WINE STOCKS UPON WHICH DUTY HAS

NOT BEEN PAID ON 30 JUNE

Year Sth. Aust. N.S.W. Vic. W. Aust. Q'land Tas . C 'wealth

'000 Gallons

1971 (a) 23,686 5,966 2,840 899 84 33,475

1972 (b) 24,332 8,228 4,333 873 87 2 37 ,855

(a) First collection. Source: C .B .C.S.

(b) Preliminary. AUSTRALIAN FORTIFIED WINE STOCKS UPON WHICH DUTY HAS NOT

BEEN PAID ON 30 JUNE

(Revised 1972)

Year Sth. Aust. N.S.W. Vic. W. Aust. (a) Q'land C'wea lth

'000 Gallons

1963 17,594 2,090 2,674 375 22 22 ,755

1964 17,663 2,444 2,905 350 17 23 ,379

1965 17,828 2,890 3,003 392 18 24,131

1966 16,291 3,223 3,118 426 12 23,070

1967 17,323 3,508 3,163 420 15 24,429

1968 16,387 4,073 3,133 344 23,937

1969 17,205 4,356 2,514 358 24,433

1970 17,512 4,690 2,688 381 25 ,271

1971 19,960 7,017 3,080 920 30,977

1972 (b) 20,289 7,758 4,100 897 33 ,044

(a) Queensland and W. Australian figures combined as from 1968. Source: C .B.C.S. (b) Preliminary.

Year

1963 1964 1965 1966 1967

1968 1969 1970 1971

1972

AUSTRALIAN GRAPE BRANDY STOCKS UPON WHICH DUTY HAS NOT

BEEN PAID ON 30 JUNE

Aged under

Aged 1 year Aged 2 years Aged 3 years but less than but less than 1 year 2 years 3 years and over '000 Proof Gallons

1,487 1,276 916 857

1,600 1,168 1,095 882

1,751 1,262 1,043 902

1,827 1,430 1,021 872

1,234 1,522 1,359 846

1,152 1,006 1,573 844

1,224 1,119 1,082 1,623

1,624 1,362 1,047 1,226

2,041 1,539 1,075 1,114

(a) 1,971 1,925 1,393 856

Total

4,536 4,745 4,958 5,150 4,961 4,575

5,048 5,259

5,769 6,145

(a) Preliminary Source: C.B .C.S .

NOTE: The quantity of Grape Spirit used in production of Blended Brandy was 419,820 proof gallons in 1971/72.

Page Twe nty-seven

AUSTRALIAN STATISTICS

PART IV. STOCKS UPON WHICH DUTY HAS NOT BEEN PAID

(continued)

Year

1963

1964

1965

1966

1967

1968

1969

1970

1971

1972

AUSTRALIAN FORTIFYING SPIRIT STOCKS UPON WHICH DUTY

HAS NOT BEEN PAID ON 30 JUNE

(Revised 1972)

N .S .W.

Sth. Aust. Victoria and W.Aust. C 'wealth

Queensland

'000 Proof G allons

1,497 532 19 2,048

1,586 544 35 2,165

1,404 210 19 1,633

1,338 611 31 1,980

1,202 343 19 1,564

879 370 17 1,266

846 357 21 1,224

718 518 26 1,262

1 '115 341 29 1,485

(a) 1,210 760 31 2,001

(a) Preliminary Source: C.B .C.S.

Page Twenty-eight