Winery collapse heightens industry fears

A wine industry leader has warned it is too early to expect improvements in business conditions, after the collapse of a fourth-generation family winery in Victoria's north-west.

Buller Wines, based in Swan Hill and Rutherglen, has gone into voluntary administration, appointing Deloitte to take over the business's management.

Wine Victoria's chairman, Stephen Strachan, says many wine producers are feeling the pinch and talk in recent weeks about the industry improving has been premature.

"What I see is that the industry is getting healthier in terms of the outlook," he said.

"I think there are positives on the horizon and I think that we can point to some success, particularly at the top end of sales but if you look at the industry as a whole, we're still not seeing the financial returns in the industry that you need to really argue that we're long-term sustainable."

Mr Strachan says the state's wine producers will be disappointed to see the winery go into administration.

He says other wineries will be fearing a similar fate.

"We've gone through a really tough period of oversupply, we've had an exchange rate that's worked significantly against us and in the context of the GFC [global financial crisis] trading conditions have probably never been tougher," he said.

"So there are businesses that are really feeling the pinch at the moment and obviously this is one of them."

Source: ABC News, 19 December 2012