The South Australian government has announced a $109 million support package for the state’s struggling wine industry.
Grape growers across Australia have pleaded for support since the start of the pandemic, when the industry experienced a major glut of red wine due to China’s ban on Australian wine imports and a global downturn in wine consumption.
SA is home to several major wine regions, including the Barossa Valley, McLaren Vale and the Riverland.
Interest on the loan after the first two years is expected to sit at 7.2 per cent. (ABC News: Grant Puckridge)
Premier Peter Malinauskas announced the package today with $100 million dedicated to loans to help growers transition to other crops.
He said eligible growers would be able to access loans of up to $500,000, with no principal or interest repayments required for the first two years.
The loans will be split into two groups, with smaller growers able to access up to $250,000 and larger entities up to $500,000.
The support package also includes supporting the disposal of chemically treated wine posts, addressing wine surplus inventories and a two-year extension of the Global Wine Growth Program to drive international demand
Calling for support for years
The state government said the package aims to address the oversupply of wine production plaguing the industry, with the hope that small and large growers will take up the loan scheme and diversify to other crops.
It is something Liberal MP and ex-Riverland wine grape grower Tim Whetstone said he has been calling for years.
“I’ve seen the hardship that my constituency and the region have been through over [the last] four to five years,” he said.
Tim Whetstone says the announcement will provide some certainty for growers. (ABC Riverland: Eliza Berlage )
While Mr Whetstone welcomed the announcement but said more detail was needed.
“Growers are in a state of paralysis at the moment, not understanding where to go and what that support will mean for individual businesses,” he said.
Shadow Primary Industries Minister and Riverland resident Nicola Centofanti echoed Mr Whetstone’s comments, but questioned the 7.2 per cent interest rate once the two-year reprieve concludes.
“It appears to be more of a commercial rate than a concessional one,” she said.
$2 million has been allocated to tackle the disposal of chemically treated wine posts, including establishing a regional storage site. (ABC Riverland: Amelia Walters)
Chief executive of Freestone Estate Lucy Clemments said she believed about 10 to 15 per cent of SA winegrape growers had already left the industry in recent years.
“It’s been tough for a very long time,” she said.
“It is a pivotal moment for all South Australian growers and winemakers, and it’s the start of a journey of recovery.”
Seventy-two per cent of Riverland wine grape operations recorded losses in the most recent season, with some red wine growers receiving $150 per tonne against production costs of $300 per tonne, according to CCW Co-operative Limited.
Andrew Weeks says growers are weighing whether to stay in the industry. (ABC Riverland: Eliza Berlage)
Chief executive of Riverland Wine Andrew Weeks said the wine grape crisis is evident everywhere you look.
“If you travel round [our region] there’s a lot of vines that are just turned off, and they’re not pulled out,” he said.
“There are people still making up their minds as to whether they want to continue growing grapes or whether they want to try and get out of the industry altogether or transition to something else, so hopefully this provides some cause for optimism for people to start making plans.”
Wine part of ‘state’s identity’, premier says
Premier Peter Malinauskas said the package was designed to provide an equitable way forward for everyone working within the $2.4 billion industry.
“The wine industry is [central] not just to the state’s economy, but, frankly, to the state’s identity,” he said.
Peter Malinauskas says the government had to consider its response carefully. (ABC News: Daniel Taylor)
The premier said it had taken time to deliver the support package because it was something his government did not want to rush.
“We’re ultimately talking about an oversupply, which is different to a natural disaster, so it’s got to be thought through very carefully how we calibrate this response,” Mr Malinauskus said.
Expressions of interest for the loan scheme will be available online next week.
