Wine glut: something to whine about

A report is about to be completed by four wine industry bodies which they hope will solve overproduction issues and low prices.

The Wine Industry Restructuring Action Agenda is expected to be released by the end of the week.

This follows on from recent media reports outlining wine companies in the Barossa Valley having to close their businesses and abandon vineyards as demand for their product dries up.

Australia’s largest agricultural investor (until it went into receivership in May), Great Southern, has announced it has shut the gates on a large proportion of its South Australian vineyards. Constellation Wines has said it will close its Stonehaven Winery on 27 November after just 11 years. The announcement comes only months after it closed its Leasingham winery at Clare. Industry leaders expect 6000ha to 8000ha of Australian vineyards will be left barren this year due to climatic and economic problems and prime vineyard land in McLaren Vale is reportedly set to be sold for housing.

Barossa Valley MP Ivan Venning is confident an industry led restructure is the best way forward and says the report will hopefully lead to Government action.

“We don’t want to talk about vine pulls, but exit packages certainly need to be on the agenda,” he said.

“We just want to see how the industry will put it.

“The Government will have a good look at it and hopefully when the report is out and agreed to, we see pretty quick action.”

Wine Grape Growers’ Australia executive director Mark McKenzie has said that a large percentage of the grape growing and wine making community was in severe financial stress with at least 20,000ha of vineyards more than needed.

The fallout of the wine slump has delivered bargain-priced wines to consumers as companies look for new ways to offload unwanted grapes. The crisis has been exacerbated by an export market crash from the $2.98 billion peak in 2006-07 to $2.35 billion in the past 12 months.

The rising value of the Australian dollar is also making it difficult to sell wine to major overseas markets.

“The Government has made it clear they won’t get involved in an old-style vine-pull scheme,” McKenzie said.

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