If anyone cares to look at the OIV website, they will notice a chart that shows global wine production falling below annual consumption for the first time since world war 2. The brilliant thing is that Australia has had two great vintages in a row so has ample stock to supply demand. If you throw in demand stemming from China, Australian wineries will have the confidence to push through price hikes with buyers. There has already been a pivot from UK to China in the past three years and if Tesco, Aldi et al want to continue to source Australia wine, they will simply need to pay more. What puts AVG in a particularity good position is its access to fruit. Indicative pricing is already rising and i would wager this will continue for the next 2-3 years. After a decade of over-supply, high AUD, global recession - the tide has without any doubt turned for Australian wine.
AVG Price at posting:
46.0¢ Sentiment: Buy Disclosure: Not Held
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