The Riverland wine-producing region is incredibly important to the Australian wine industry in terms of scale, economic contribution, diversity, export value, technology and structural change, and innovation.
It is a long-established, warm climate region, extending for 330 kms along the Murray River. It is the largest Australian wine region by size, number of growers (936), volume of crush (30.3%), and wine grape varieties (85). The region’s annual crush value is estimated to be $272,787,575 which includes Cabernet Sauvignon valued at $46,093,008 and Shiraz $85,814,401.
The Riverland red wine bulk market is paralysed. A lack of surety in the current global shipping environment, and the supply challenges resulting in lower grape prices are severely impacting the wheels of business in the region. Additionally, Australian red wine varieties had the lowest average offer prices in February 2022 of the major wine-producing countries. An estimated 30K tonnes of bulk red wine grapes of the 461K tonnes of grapes produced in the region have no domestic or export market contracts.
The negative impact of China tariffs should not be underestimated. To meet the international demand, the Riverland region increased the proportion of red wine to around 70% of production to cater specifically for the Chinese market and this sudden loss has broader economic implications for the Riverland region.
A PERSONAL ACCOUNT
This week, Riverland Wine received a letter that articulates from a grass roots perspective the daily expressions of economic fallout, outrage, frustration and, cries for help throughout our community.
“We are in full swing of intake – harvesting & crushing.
Reports from growers are that:
- the quality of grapes is looking excellent to produce good quality wine for the 2022 vintage
- yields seem to be down 15 – 20% across all varieties.
It is devastating to hear that offers of $150 per tonne have been offered to growers.
- This is unacceptable
- Riverland Wine should name and shame the winery that is offering these prices
- This is not where the industry is, and we should not accept such offers
Riverland Wine should refuse these low offers, name, and condemn these low price offers, and growers should refuse as this is not a reflection of the industry.
Growers should contact Riverland Wine if they continue to receive low offers for their commodity.
A press release should be put out by Riverland Wine summing up the situation, in support of growers not to accept low prices”.
The Riverland wine region must reshape, repair, and restructure their product mix to meet international demand in our new markets ahead of the shipping crisis easing. Transitioning to product diversity, upskilling for market growth, improved environmental accountability, and adopting new and environmental approaches to viticulture are crucial to the region’s future economic prosperity and community wellbeing.
Riverland Wine is seeking short-term support to help bridge it through the next two years of trading.
Our two key priorities for the South Australian Government are:
- Export support that focusses on producers in the commercial market in addition to existing export market support.
- Support for grape growers to adapt production to changing international market trends and tastes in wine, wine and wine products and tourism.
We commend the Liberal Government on the investment in overseas trade offices during their term in government and their commitment to open another three trade offices if re-elected.
Although there are existing wine export programs, the emphasis is on higher-priced wines and thus has limited impact on the Riverland regions producers and growers.
To assist the recovery from the China market shock, we are seeking $500,000 over 2022 financial year for the region’s exporters to invest in new marketing and distribution channels.
To coincide with the opening of new trade offices in India and Southeast Asia, we request export marketing funding of $750K in 2023 and $750K in 2024.
Support at this level will accelerate the recovery of region’s economic, environmental and community status.
We are also seeking $500K of support for local producers to undertake targeted marketing activities in interstate markets for the regions smaller producers to help us prepare them for international market success.
PRODUCT MIX SUPPORT (VITICULTURE)
We seek co-funded support for changes in viticulture. The product mix in the Riverland adapted to meet the previous Chinese demand for red wines, largely Shiraz and Cabernet Sauvignon. The region now needs to transition to varietals that meet international trends and climate change. These include Low/No Alcohol, more white varietals, alternative styles, and Mediterranean varietals.
We are seeking dollar for dollar matching from the government for grafting vines from over to new varietals in line with changing market tastes and demand.
To assist the investment in new varietals, we are seeking $350K from State Government to incentivise Riverland growers. We are also seeking dollar for dollar support for growers transitioning to organic production certification.
PRODUCT MIX SUPPORT (PRODUCTION)
We applaud the Government’s commitment to low and no alcohol with research infrastructure established at the University of Adelaide to support this transition. This program will be strongly supported in the region, but it needs to be extended in dollars and in time to become a major industry initiative. We support the transition of production to new products at 9% alcohol by volume (abv) and below.
We are seeking a program of targeted infrastructure support for wineries to implement the technologies to produce these wines in addition to the funding for flavour profile research. This may include both production and packaging technology.
PRODUCT MIX SUPPORT (TOURISM)
We are asking the Government for co funded support and to provide $200K to specifically focus on the underdeveloped food and wine tourism assets of the Riverland region, with regional development funding specifically targeted to better exploiting the regional natural assets and its extraordinary food and wine production capabilities.
Our other priorities are biosecurity and water.
We encourage the Government to continue to support the Goyder Institute and to provide $150K of funding for a water security study for all the South Australian regions that are dependent on the Murray- Darling Basin.
We seek clarity about the extent of permanent water allocation help by growers vs the amount of water purchased on the open market stress testing of the risks to wine production security.
We are conscious that Vinehealth Australia has been instrumental in the protection and monitoring of the region from fruit fly and phylloxera incursions. We encourage the South Australian State Government to support Vinehealth Australia with funding for its modernisation initiatives.
Government support and commitment to the Riverland wine region to deliver these initiatives is integral to the survival and success of the region.
– Lyndall Rowe, Executive Officer, Riverland Wine
0407 305 623; email@example.com