Grape growers in South Australia's Riverland region, Australia's largest wine grape growing area, are facing a crisis as wine prices have plummeted to levels not seen since the early 1970s. Some wineries are offering growers as little as $120 per tonne, while production costs are estimated to be around $300 per tonne. This has left many farmers in financial ruin, with some considering walking away from their vineyards.
The crisis is not unique to the Riverland, as the global wine industry is facing an oversupply of red wine due to changing drinking habits. However, the warm inland regions of the Murray-Darling Basin, which supply almost 70% of Australia's wine grape crush, have been hit particularly hard. Grapes from these areas are primarily sold for bulk wine production, and the biggest buyer is multinational company Accolade Wines, which produces brands like Banrock Station and Berri Estate.
The tensions over low prices have intensified ahead of the 2024 harvest, with growers protesting in the streets of Renmark last month. Grape growers are concerned about a lack of transparency from wineries and a lack of support from the industry and governments. Some have resorted to using chemicals to stop their grapes from germinating rather than harvesting them at a loss.
The crisis is also affecting the local economy, as growers reduce their spending on tractors, spray plants, and other equipment. Industry bodies and government representatives are meeting to discuss the crisis and potential solutions, including an exit strategy for growers who wish to leave the industry, alternative agricultural crops and commodities, and a vine-pull scheme.