CANBERRA: Wine Australia has signed an agreement with the country’s export credit agency to help wineries make the most of overseas markets. The Export Finance and Insurance Corporation, owned by the Federal Government, partners with banks to provide financial support to small and medium export businesses.
Wine Australia chief executive Andreas Clark said accessing the right finance was essential to a winemaker’s export success. “At a time when Australian wine exports are growing, it is important that wine exporters are aware of all of their financing options so they can maximise their export opportunities,” he said.
EFIC executive director of export finance Andrew Watson said many winemakers were unable to secure export finance from their regular banks because the amounts needed pushed them above their borrowing limits.
“The working capital cycle in the wine industry is quite different from many other industries because the time that it takes from the production of the grapes to the finished product is much longer than you’d find in many other industries,” Mr Watson said.
“Wine is also an incredibly competitive industry globally, which means that there’s extra financial risk.” Finance for exporting and expansion has been a problem for wineries across Australia for several years.
South Australian winery Gemtree Wines faced financial barriers to exporting when tightening credit conditions meant its overseas bank stopped lending it money to meet its $3 million contract to export 900,000 litres of wine to the US.
Chief executive Andrew Buttery said the winemaker – one of Australia’s largest wine exporters – was now backed by EFIC and was looking at opportunities to sign contracts with overseas supermarkets.
According to the latest Wine Australia export report, in the 12 months to September, Australian wine exports recorded their strongest growth since 2007. The total value of wine exports increased by 8 per cent to $1.96 billion and volume increased 5 per cent to 734 million litres.
