Not so long ago, it was not uncommon for growers and winemakers to express frustration at the challenge of high exchange rates and relatively few Free Trade Agreements (FTA’s). These circumstances were real impediments to our competitiveness in international markets. That landscape slowly changing. The exchange rate continues to move slowly into more favourable territory.
With the signing of the Chinese free trade agreement this week this region’s international competitiveness has had a real boost. Minister Andrew Rob and his team, including our own local member Tony Pasin have done great work this year. The FTA with China, added to those signed earlier this year with South Korea and Japan give real encouragement to those with the unenviable challenge of selling and exporting millions upon millions more litres Riverland wine.
This column has often remarked that there is no single silver bullet that will resolve the wine industry’s challenges. Winemakers Federation chief Paul Evans said the same thing earlier this week when commenting about the FTA with China. He said: “These announcements are timely, but there’s no silver bullet; there’s going to be a lot of heavy lifting by industry and in partnership with government”.
With reference to the China agreement, local member, Tony Pasin MP said: “This is an outstanding agreement which will translate into greater economic growth, more jobs, and higher living standards for local households and business.”
Riverland Wine members have been doing their own share of heavy lifting. As was revealed recently, this region has been prudent in terms of its vineyard expansion, with an increase in planted area of 3,144 ha over the past fifteen years. This contrasts sharply with the increase of plantings across other South Australian regions where an additional 18,257 ha have been planted during the same period. The Riverland is the only SA region to have decreased its grower population (by 200 growers) during that period while other SA regions have increased the grower population by more than 1000.
Admittedly, it’s horses for courses. There may well be local justification for those increases in hectares and vineyard enterprises. It’s not the case for this region. To achieve high levels of competitiveness through productivity and efficiency improvements it is well recognised and amply demonstrated, that enterprise scale is a critical factor for most with some outstanding exceptions where producers have established niche markets, particularly in the area of alternative varieties. Slowly, slowly the Riverland will assert itself as the vineyard to the world!