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Tough times ahead for Riverland
Taxes and a lack of innovation are behind a dearth of profitability for Australia’s Riverland producers who now need to make dramatic changes.
Storm clouds are gathering over the future of the Riverland.
About 300 wine growers have left the Riverland, in South Australia, over the last ten years and yesterday saw growers and producers from the region meet to discuss their future, reported the ABC.
A recent report from the Winemakers federation of Australia showed that 94% of Riverland grape growers were unprofitable and, in an interview with the ABC, Bill Moularadellis from Kingston Estate Wines explained some of the factors behind the state of the region.
Moularadellis said one of the key factors is the Wine Equalisation Tax which means producers pay 29% tax on any sales to retailers: “I think there has to be a reform of the WET system where the rebate is on bulk wine. That’s having a significant effect on the market opportunity for Australia.”
Moularadellis also said the wineries will need to rethink how they market their wines: “I think there were some key messages about improving market access and making sure that we put more resources into product innovation and developing more export opportunities.”
He said that wineries need to listen to what consumers want but growers also need to take responsibility and make adjustments as well: “I think there are two camps, I think there are those growers that really understand the commercial reality and there are others that were, I guess, hoping for things to improve.”
One Riverland grower, Peter Hill, told the ABC that growers were under no illusions about the state of the market: “We got a bit of an insight from the wineries’ point of view, how tough the market is, how competitive the world market is with wine and we’re in for a couple more tough years by the look of it.”
“It’s tough times. We’ve got to soldier through the next 12 months and hopefully prices hold similar to last year and we sell more wine overseas,” said Hill.
“There are new markets and there’s also our traditional markets and I think if we get into those markets in a bigger way more sales will hopefully happen.”