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Premium quality softens wine crisis

Posted on November 14, 2009, 10:10am

The Limestone Coast will not be hit as hard by restructuring of the wine industry as marginal areas due to its focus on premium production, according to regional vignerons.

“The Limestone Coast is part of the Australian wine industry and the pain will be shared across the country with the need to cut production by 20pc,” Limestone Coast Wine Industry Council chairman Brendan Provis said.

“But I wouldn’t expect 20pc of the Limestone Coast to go as there may be bigger cuts in other places, however, there is no point putting our heads in the sand about it.”

The Wine Restructuring Action Agenda released this week by the four key industry organisations outlines a national wine industry surplus of 100 million cases a year and need for change to avoid long-term damage to the sector.

Mr Provis said he expected some production to be reduced in areas with stressed water resources and other problems, but nationwide action was needed as the issues “is not going to go away”.

He said uncontracted growers may account for some of the change, but only made up a small part of the 15,500 hectares of vines across the Limestone Coast.

“There will be a range of action resulting from the agenda — some may decide to pull out of the industry totally, some may remove a section of unprofitable grapes and others may change varieties,” he said.

Mr Provis said discussions needed to continue with governments to improve exit packages to help growers leave the industry.

“That may be a way to get the necessary reductions quicker,” he said.

“But then again, it is partly taxation concessions over the past 10 to 15 years for wine industry that partly got us into this mess so the government may not be keen to be paying at both ends.”

Mr Provis said smaller fruit growing businesses that value-added with their own labels may have some protection from the market problems.

Mount Gambier wine grower David Herbert said the changes should have little impact on Mount Gambier.

“The big problem is oversupply of varieties like Cabernet, Shiraz and warmer climate Chardonnay, which is grown over tens of thousands of acres in Australia,” he said.

He said Mount Gambier and Mount Benson grape growers focused on sought-after, high quality pinot noir, and white varieties such as Chardonnay, Riesling and Sauvignon Blanc.

“We are lucky to be able to grow premium grapes in this region, which mean there are better prices for fruit, so we’ll come out better than the warmer climate areas,” he said.

“But the oversupply has hurt every grower in the country as it has forced prices down.”

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