Dairy industry can follow wine's lead, says expert

Thursday, 13 July 2000

AUSTRALIA'S deregulating dairy industry can learn important economic lessons from its booming wine counterpart and become another export-led success story for Australia, according to the latest research from Adelaide University.

A discussion paper written by the director of the University's Centre for International Economic Studies, Professor Kym Anderson, says the dairy industry is already poised to build on its own achievements of the past 10 or so years but -- despite deregulation -- it could expand even further if it heeds the example of wine..

"There is no more spectacular rural economic success story in Australia than the wine industry during the past decade," Professor Anderson said.

"Increased export demand explains much of the industry's growth over the 1990s, and has come about mainly through an increasing emphasis on quality, and a much bigger effort trying to boost Australia's image overseas as a producer of good value-for-money wines.

"The clearest implication for the dairy industry is that dramatic export-led expansion is possible, but not without substantial hard work and large investments of time, effort and money.

"This effort must be invested in all three stages of the production process: primary production, processing, and marketing and distribution."

Professor Anderson's paper, Lessons for Other Industries from Australia's Booming Wine Industry, also identifies five key strategies which could be considered by the dairy industry in light of the wine industry's phenomenal growth in the past decade.

"The dairy industry is poised to build on its remarkable achievements of the past decade or so as the last stage of deregulation proceeds, and it has the potential to become another expert-led success story for Australia," Professor Anderson said.

"Australia could become a strong international competitor in markets for dairy products, particularly if it heeds the lesson from wine that efficient targeted marketing and distribution networks in export markets are essential."

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