SUNRAYSIA wine-grape growers are now waiting for the blow to fall here after industry giant Accolade Wines told cabernet and shiraz growers in SA’s Riverland to mothball their vines or switch varieties.
In a statement at the weekend, Accolade offered its grower-suppliers $1000 per hectare to mothball, or $1250 to switch from red grapes to white.
In a statement, the company said the collapse of the Chinese market had caused the massive glut in red wines.
One Sunraysia grape grower said the “SA bounty to swap varieties” wouldn’t solve the immediate problems and the $1000 to mothball would only pay partially for the hit growers will face.
Another grower told the ABC: “I’m not going to knock it back, but it won’t pay all the bills.”
A few months ago, Treasury Wine Estates, one of the world’s major winemakers, announced a massive solar power investment in its Karadoc winery near Mildura, one of its biggest Australian operations. Between Mildura and a Barossa Valley site, Treasury is installing 9500 solar panels.
Accolade Wines chief supply chain officer Derek Nicol said there was already a stored 400 million litre red wine excess before the coming harvest, and warned SA growers they could expect only about $150 per tonne for shiraz and cabernet in 2023.
This is way below the cost of production.
A Wine Australia spokesperson told Sunraysia Daily: “There is no doubt there is considerable pressure on the Australian grape and wine sector, with the sudden loss of the China market, impacts of COVID-19 and the global shipping delays making it difficult to get stock to market.”
“It is not likely that there will be any significant improvement in these areas before next vintage,” the spokesperson said.
“However, every grower is in a different situation, and some fruit is in strong demand – as has been shown in the recently released National Vintage Report.
“Growers should discuss their options with their purchaser now, and not wait for next vintage before planning ahead.
“We would also encourage growers and winemakers to use Wine Australia’s Ask an Analyst service to get objective information on current market conditions to help with their decision-making.”
Inland Wine Regions Alliance chair Jim Caddy agreed the news would be worst for growers with those reds in their vineyards.
Mr Caddy said he expected about 25 per cent of those varieties would be at risk.
However, he said he expected the rest of the vintage to go through without too much further trouble.
“It’s hard to tell what vintage will be like this year, with the vines just starting to bud,” Mr Caddy said.
“It will be at least six more weeks to get a clear picture of the size of the next vintage, provided we don’t get a bad frost in between.”
In a separate industry announcement, winemakers have expressed widespread disappointment with the announcement they may be forced to detail the calories in the labelling on wine bottles as early as next year.
The new conditions will include a pregnancy warning as well as energy and sugar content information.
The decision is the result of a 2018 bipartisan campaign by food ministers from Australia and New Zealand to make the information mandatory. The wine industry was given until 2023 to implement the new laws.
With the cost expected to be almost eight cents a bottle, Mr Caddy says the phase-in needed to be well planned as some of the industry’s major players and larger private enterprises would probably already “have millions and millions of labels pre-printed for the coming vintage”.
“We knew it was coming, but it needs to be phased in, not enforced in one fell swoop.”
Treasury Wine Estates chief supply officer Kerrin Petty said his company had been “continually monitoring changes in consumer preferences and other factors like macroeconomic shifts that influence demand”.
Mr Petty said Treasury expected demand to continue to remain resilient, especially for premium and luxury wine.
The company’s agreements with its grower suppliers are different from the co-operative models used by hundreds of Riverland producers.
“We value the relationships with our grower network, and continually assess our requirements from each source,” Mr Petty says.
“Many of our growers have been supplying fruit to us for generations, allowing us to keep up with growing demand in the US, UK, and parts of Asia including Thailand, Malaysia, and Singapore.”
Murray Valley Winegrowers did not respond to a request for comment.
