Sunraysia growers have faced one of their toughest years, and Murry Calley Winegrower chairman Brian Englefield said wine prices would need to double to match the price of production.
Englefield said despite the need for an increase, purchasers are simply not going to pay the extra 50 percent, the Weekly Times reports.
“The wine industry is generally not a happy place at the moment, down the entire value chain,” Englefield said. “Just as many wineries are in trouble as winegrape growers.”
Englefield said that a number of wineries are claiming their margins are being eroded by poor trading, but the dollar has come down and growers’ prices haven’t come up.
“To maintain your vineyards and pay tax — which is a good barometer of success — you need to be getting $12,000/ha,” Mr Englefield said. “On average this season, growers in Sunraysia wouldn’t have covered their cost of production and certainly not made operational margins. Maybe the top 25 percent — those who have redeveloped their properties and converted to high-density production and new varieties — still have contracts and might have made a profit.”
Grapegrowing has been “downhill” for the past 10 years, but Englefield said the way forward is accurate market information, to help growers make informed business decisions and long term plans.
Merbein grower Lindsay McClelland said there needs to be greater engagement with farmers and wineries.
“As an industry we need to work together to find our way through this hole,” McCelland said. “Family-owned winemakers are the future of the industry, because big companies play to shareholders and are so far removed from what’s happening on the ground. You can’t expect to make an increased profit every year. It’s a cyclic process.”
The alcohol industry has experienced a drop in business, with the ABS reporting that alcohol consumption has been falling over the past six years.
In 2013, wine consumption dropped to the lowest it’s been in seven years.
The statistics show that the volume of wine available for consumption decreased by 0.5 percent, from 543.7 million litres in 2011-12 to 541.1 million litres in 2012-13.