Australian winemakers prayed for a weaker exchange rate as a record-high currency made their bottles less profitable overseas. Now they have a new problem: getting what they wished for.

While a drop in the Australian dollar means they can sell better wine for the same cost, a bumper grape crop threatens a glut that could encourage price-cutting and lower quality instead. That may not be good news for companies such as Treasury Wine Estates Ltd., which hope to lift prices and goose profits by shaking off the country’s low-cost reputation.

8/8/2013