Winegrape growers are calling for government assistance with an oversupply of grapes that is sinking prices and leaving fruit unsold.
- Wine exports drop by 26 per cent in 12 months with no relief in sight for winegrape growers
- Oversupply of grapes could see “generational shift” as vineyards hit the market
- Grapes left unsold, while wineries build extra storage to accommodate the glut of wine
The crisis in the global freight sector, along with China’s decision to impose massive anti-dumping tariffs just as Australian growers produced a large crop in 2021 are behind the glut.
The latest Wine Australia figures show exports were down 26 per cent year-on-year.
This has been coupled with rising input costs, which have at least doubled in the past year due to increased disease-pressure and the cost of chemical, fertiliser, fuel and labour.
Industry body Australian Grape and Wine said it expected difficult commercial conditions for the next three to five years.
The situation is especially dire in South Australia’s Riverland, where 80 per cent of the wine produced is exported.
Riverland wine executive officer Lyndall Rowe said while interest from south-east Asian markets had been promising, it could not absorb the supply in the short term.
“It’s still positive because it’s a foundation step … but it will take time to grow.”
Ms Rowe said the drop in demand had led many wineries to seek outside storage and build additional tanks.
While the region finished harvesting grapes in early May, Riverland’s CCW Co-operative chief executive Jim Godden said storage at most wineries was full by March.
Mr Godden said he did not know how many members were out of contract but had received numerous calls from people trying to find a home for their grapes.
Generational shift in vineyard ownership
The Riverland is home to more than 900 growers but some are choosing to get out of the game.
Real estate agent Sam Hayes from Toop Toop Rural said a number of vineyards in the region have been listed recently.
Mr Hayes said while the initial interest was from local buyers, the value for money could attract wider investment.
“What is currently a liability could be an asset again very soon.”
Recently, Australia’s largest family-owned winery, Casella Family Brands, put 35 of their vineyards up for sale across New South Wales and South Australia.
Colliers is handling the sale and national director of agribusiness Tim Altschwager said the offering was not related to the current oversupply issues.
Outlook for next season ‘disastrous’
In the Riverina, there are growing concerns that wineries could cap grape deliveries for next year, which could see the price of red grape varieties drop even further.
Riverina Winegrape Growers president Jeremy Cass said the outlook for next season was “disastrous”.
Fourth-generation Griffith winegrape grower James Cremasco described the current situation as a losing battle, but said they would keep going, as the family always had.
“There is a lot of hardship, and there’s generational farmers. I’ve got mates my own age, they’re all talking about ‘what are we doing this for?’,” Mr Cremasco said.
Assistance needed as grapes left to rot
In the Murray Valley it is estimated that 20,000 tonnes of fruit were left unsold this season.
Murray Valley Winegrowers executive officer Paul Derrico said anyone who had red grapes that were uncontracted had found it very difficult.
The grapes that haven’t been sold to a winery still need to be harvested, otherwise it can have an impact on the vine and crop for the coming year.
“If we could get some form of assistance … given the heartbreak that growers have gone through over the past few months of not being able to sell their fruit,” Mr Derrico said.
A spokesperson for the Victorian agriculture minister acknowledged winegrape growers were being impacted by global demand and supply chain challenges as a result of the pandemic.
“We are working closely with growers and industry groups to support them to manage these impacts,” the spokesperson said.
Mr Derrico said his organisation had also requested support from the NSW government.
“At this stage it seems that the NSW government would probably not provide a direct financial assistance to help growers harvest their fruit, instead referring growers to the rural small business grants and rural assistance loans.”