Farmers in Australia’s biggest wine grape growing region are preparing for crisis talks as prices plummet to early 1970s rates.
Some wineries are offering growers in South Australia’s Riverland as little as $120 a tonne, while production costs are estimated to be about $300 a tonne.
Saddled with debt, farmers like Simi Gill are at breaking point, and she is now considering walking away from the vineyard her late father planted more than 40 years ago.
“I think this year is the last year that we can make it through,” she said.
“We just need to pay off any debts, and we are ready to get out of our vineyard anyway we can.”
The Punjabi-Australian family is among more than 900 Riverland growers who have been invited to meet with wine industry bodies, as well as local, state and federal government representatives at crisis talks on Wednesday.
The issues confronting the Riverland are not unique, as the wine industry struggles globally with an excess of red wine as drinking habits change.
But the warm inland regions of the Murray-Darling Basin, which supply almost 70 per cent of the country’s wine grape crush, have been hit the hardest.
Grapes from these areas are primarily sold for bulk wine production, with the biggest intake going to multinational company Accolade Wines, which produces brands like Banrock Station and Berri Estate.
Tensions over the low prices have intensified ahead of the 2024 harvest, with growers driving their tractors, harvesters and trucks in protest through the streets of Renmark last month.
‘Can’t sleep at night’
While Ms Gill and her family have seen some tough times on their Winkie property, 25 minutes outside Renmark, she believes these are the most challenging days yet.
The second-generation grape grower is considering selling her water and walking away because the cost of maintaining the vineyard has become unsustainable.
“Some of us can’t sleep at night,” she said.
“Some of us have probably gone into depression.
“We haven’t seen something over time affect us for this long.”
After her father’s death, Ms Gill had worked with her mother and brother to manage the property.
But she said their situation has now been worsened by a lack of transparency from wineries, and a lack of support from the industry and governments.
Ms Gill’s uncle Mintu Brar, who grows wine grapes at Kingston-on-Murray, has used his YouTube channel to help attract hundreds of families to migrate to the region.
But rising financial pressures have led him to advise his millions of viewers to hold off before committing to a similar move.
“I’m feeling very angry and very desperate as well,” he said.
“If the farmers are gone, than the Riverland will be gone.”
1970s prices
At Cobdogla, third generation grape grower Peter Arnold said the 2024 low has followed several historically poor years for grape prices.
“We were getting the same prices back in the early 70s as we’re getting now, and our costs have gone through the roof,” he said.
The 71-year-old has removed most of his vines, instead planting pumpkins or just leaving the ground bare where he once grew fruit.
“My good old dad said you’ve got more than enough, just pull it out,” Mr Arnold said.
“But for the others that are trying to make a living out of it and bring up a family, it’s dire for them.”
Up river at Renmark, Ray Hartigan has sprayed a chemical called ethephon to stop his grapes from germinating, rather than be paid below the cost of production to harvest his crop.
The 80-year-old retired soldier is the only grower who has accepted a state government subsidy for the spray.
While he is trying an alternative method to keep afloat, he’s concerned that some growers won’t live to see another vintage.
“I need $400 a tonne to break even but they’ve offered me $150 a tonne,” Mr Hartigan said.
“We’re being offered to be screwed slowly.”
Mr Hartigan said the cost of maintaining his vineyard was eating into his superannuation, and if growers were struggling then the local economy would lose out too.
“I was going to buy a new tractor last year and I was going to buy a new spray plant this year — that’s $100,000 that isn’t going into the community here,” he said.
Exit strategy needed
General manager of US-owned company The Wine Group (TWG), Brigid Nolan, said wineries were offering low prices as they tried to remain viable in a tough global market.
“Cost of production is sky high and the whole supply chain is under a huge amount of pressure, with the ongoing conflict in the Red Sea making logistics difficult,” she said.
“We’re feeling it as much as the growers.”
Ms Nolan said decision-makers should put all options on the table to resolve the industry crisis.
“The government needs to look at an exit strategy for growers who wish to leave the industry with dignity,” she said.
“There has to be some strategy around alternative agricultural crops and commodities, and what opportunities are there to develop those, [even] if that means [financial] assistance to pull up vines.”
The region’s industry body, Riverland Wine, said a survey conducted in 2023 revealed 20 per cent of local grape growers were considering leaving the industry in the next few years.
Grower engagement officer Charles Matheson said some substantial mental health issues were beginning to emerge.
“We really need some short-term help for things like power bills, while people work out what they can do,” he said.
The country’s peak industry body Australian Grape and Wine has requested the Federal Government provide an $86 million support package in its upcoming budget in May.
Federal Agriculture Minister Murray Watt said in a statement that the Government was working to stabilise the relationship with China, and had also raised the issues faced by the wine industry at a Food and Grocery Code roundtable last week.
He said a vine-pull scheme would require careful consideration to avoid unintended consequences.
The state government has included wine in its parliamentary inquiry into supermarket prices, while a 12-month investigation by the Australian Competition and Consumer Commission is underway at a national level.
State Primary Industries Minister Clare Scriven said she had committed $200,000 to implement the recommendations of a Riverland Wine industry blueprint, and was advocating to her federal counterparts for a national approach to the crisis.
“We don’t want growers to simply leave, shut up shop and that’s the end of the productivity of that land,” she said.
The ABC has contacted Accolade Wines for comment but no response was received before deadline.
