The wine industry in the Riverland is at a point of inflection. The region has led the way in response to marketplace realities over the past decade. An assessment of the balance sheet of the industry would make for sobering reading.
There are positive signs for the Australian wine industry as exchange rates for exporters remain in favourable territory and as highlighted last week structural surpluses appear to have been addressed. However, global competition remains particularly strong and will continue to impact on prices paid for grapes and wine.
The Riverland is also ideally poised to be a powerhouse for growing C and D grade grapes (rather than the predominately E grade currently sought) on the back of potential changes in the market opportunity for cool climate growers. Nevertheless, the Riverland also has residual structural issues that must be addressed for the regions winegrowers and winemakers to hasten the return to prosperity.
Riverland Wine has made arrangements for two initial workshops scheduled for the Waikerie Football Club on Thursday, May 19 and at the Berri Hotel on Friday, May 27. The issues to be addressed, understood and agreed by the region’s growers and winemakers will include:
- The Global Market: What is happening in other high volume regions internationally.
- Water: Our adaptation to and understanding of water pricing cycles is incomplete and many irrigators remain unaware of water risks and opportunities.
- Supply and Demand: Understanding the signals, identifying opportunities to introduce new market efficiencies, the impact of long-term contracts on market signals, grower/winery relationships, past mistakes and learnings and sustainable prices.
- Commodity Cycles: Becoming effective as a commodity supplier, and examining non-commodity pathways.
- Adapting or Exiting: Identifying and communicating the reality of efficient commodity production and growth of niche value adding opportunities; adapting to the changing timelines for winegrape maturity; and focussing on opportunities to utilise water as a key productive asset.
- Tax Changes: Understanding the implications of changes to tax arrangements.
The workshops will also explore opportunities for the Riverland wine production including:
- Understanding how comparable regions (internationally) are responding to global price challenges and adapting to be globally competitive.
- Understanding the options presented by water markets to improve the return on water assets and water income optimisation.
- Supporting more niche providers for identifying and emphasising differences in soils and microclimates and examining opportunities for more organic production and identifying likely higher value customers.
- Improving our understanding of efficient commodity production; optimising land, capital and labour.
- Assessing winery and grower relationships and determining if these can be reset.
Without a change in direction, the inland wine industry confronts increasing numbers of growers exiting the industry, losing very substantial knowledge and competence, a further reduction of returns on industry infrastructure assets, a decline in regional economies of scale and further reduction of funds for innovation, research and development. More details will be included in the invitations to be sent to all members including a summary of anticipated outcomes.