It’s
rough times for Australia’s wine grape growers. Mike Stone, CEO of The
Murray Valley Grape Growers says there’s 21,000 tonnes of grapes listed
on the ‘Wine Grapes for Sale’ index, a service provided to help growers
from the Riverland find a home for their crop. That equates to almost
1.5 million bottles of wine. The question is, will these grapes find a
home, will they ever become wine, or will the grapes be cut from the
vine, dumped on the ground and left to rot?

So bad is the
problem predicted to become that the Sunraysia Rural Counselling
Service is preparing for a rush of depressed growers once the vintage
is over; they have approached Canberra for extra funding and support.
Mike Stone predicts the loss to the local economy could be $8 million.

Pressure
is coming from companies like McGuigan-Simeon who are offering prices
that are described by growers as ‘below sustainable levels’.
McGuigan-Simeon, along with all the big wine exporters, are in turn
suffering from competitive prices demanded by their major customers –
mainly the large supermarket groups in the UK and Australia.
McGuigan-Simeon recently announced a profit downgrade citing factors
that included the strength of the Australian dollar and the loss of a
five million litre contract. The announcement generated a drop in share
price of 17%.

News from the UK is that although the market for
Australian wine is still growing, price per litre is not. This is
working its way back to lower profits for producers and lower prices
for growers. For more information on the business of wine: The Key Report.

Peter Fray

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