Small fraction of Aussie growers in profit

An Australian senator and a leading wine trade body have voiced concerns over the state of winemaking in the country, as a report has revealed only 12% of grape growers made profits last year.

Senator Nick Xenophon has said wineries are acting like “feudal landlords” with their suppliers (Photo: Wiki)

Nick Xenophon, the independent senator for South Australia, has pointed to an industry report into the 2014 vintage that showed worrying statistics highlighting the difficulties being faced by the country’s winegrowers.

According to the Winemakers’ Federation of Australia (WFA), just 12% of the country’s winegrowers made profit in 2014. Some individual areas are faring even worse, such as the Riverland, where only 1% of growers made financial gain last year.

Grape prices have been plummeting in the country for the past 15 years. Last year, a tonne of grapes commanded an average of AUS$441, down 12% on AUS$449 the year before. In 2001, a tonne of grapes was worth around twice as much, at nearly AUS$1,000.

Senator Xenophon described wineries as acting like “feudal landlords”, demanding cheaper and cheaper prices from increasingly desperate vignerons.

“The voluntary code of practice between wineries and growers – that’s meant to provide some certainty to plan ahead – isn’t worth the paper it’s written on,” he said.

Wine grape prices have suffered from a severe downward trend over the last 15 years (Photo: WFA)

His comments come as the Australian federal government announced at the end of March the beginning of an inquiry into the health of the winemaking industry.

Backing the inquiry, fellow South Australian senator Anne Ruston said, “For the last couple of years, I’ve constantly watched as the industry has battled with a number of issues and it became apparent that there were perhaps some opportunities that we should have been pursuing that we weren’t.”

However, “the inquiry will be too late for growers who are already at breaking point,” said Xenophon.

Mirroring these concerns, Paul Evans, WFA chief executive, wrote in the industry body’s 2014 report, “We must take immediate action with government to grow demand for our wine and accelerate the correction to the supply base.”

According to ABC, over 200 Riverland growers have killed their vines due to unprofitability in the past 5 years.

Riverland grape grower Con Doupis blamed the wineries for setting prices well below his cost of production. He told the broadcaster, “We’re business partners with our winery, but they dictate everything.”

“They dictate grape prices of course, but that’s ridiculous,” he said.