AUSTRALIA’S winegrape producers’ association has warned that the sector is entering a structural crisis as global demand continues to spiral.
In their pre-budget submission for 2026-27, Australian Grape and Wine called on the Federal Government to protect regional communities suffering from the industry’s escalating economic impacts.
AGW’s submission outlines a three-year package using $139.25 million that aims to support growers and winemakers by addressing oversupply and rebuilding demand.
The package would target time-limited measures, with AGW chief executive Lee McLean saying the industry needs decisive action.
“This is not a short-term downturn, and it is not a problem the industry can solve alone,” he said.
“Australia’s wine sector is facing a structural crisis driven by collapsing global demand and the lasting impacts of the China trade disruption. Left unmanaged, the adjustment will be disorderly, prolonged and deeply damaging for regional communities.
“Behind these numbers are people – growers, winemakers and families – under levels of stress we have not seen in generations.
“If government delays, the costs don’t disappear. They re-emerge as business failures, abandoned vineyards, mental health crises and long-term regional decline.”
Currently, national wine inventories have reached 2.06 billion litres, of which 262 million litres are outside of what is commercially sustainable.
The AGW’s submission is structured as a preventative package that will target barriers preventing recovery, expand mental health services to affected regions, and establish export re-engagement.
Mr McLean said the package also aligns with the Government’s Future Made in Australia agenda and that inaction would create more burdens for the industry.
“This is about managing a necessary transition in a way that is economically responsible and socially humane,” he said.
“The cost of acting now is modest. The cost of inaction will be far greater and borne by regional Australians least able to absorb it.
“We are asking the Government to heed the evidence, heed the warning signs, and work with us now.
“This is a fiscally responsible, preventative investment that supports regional economies and protects long-term industry capability.”
