Wine industry struggling as Mornington Winery Group collapses

Mornington Winery Group has collapsed as the wine industry battles against a "double whammy" of high exchange rates and a consolidated retail sector.

John Lindholm and Peter McCluskey of Ferrier Hodgson were appointed as administrators to the boutique winery last week.

Expressions of interest were sought today for the winery, cellar door and restaurant with seating capacity for 110 people.

Mornington Winery Group includes key brands Dromana Estate, Mornington Estate, 'i' Range and David Traeger and has leasehold vineyards of 48.5 hectares with 19.2 hectares currently under vine.

The winery has 500 tonne crushing capacity, 130,000 litres of onsite storage and produces 10,000 cases per annum.

Mornington Winery Group's collapse follows the recent administration of the historic Buller Wines and Barossa Valley Estates.

Paul Evans, chief executive of the Winemakers' Federation of Australia, said it was a tough time for wineries.

"Like most manufacturing sectors with an export orientation we are confronting a double whammy of high exchange rates, which has seen a 30% increase in the price of products against competitors' currencies since 2008," he says.

"Domestically, we are faced with a highly consolidated retail sector and fierce competition amongst producers with the own brands of retailers and increasing numbers of imports."

Evans says many wineries are trying to diversify, as Mornington Winery Group had done, into restaurant operations along with cellar door sales.

"With so much competition domestically, all companies need to find their particular niche and speciality and focus on that," he says.

"The more businesses can drive sales volumes through formats which are high margin, the better off they are, and cellar doors and restaurants are at the top of that risk."

This article originally appeared on SmartCompany.