Devastated Riverland growers see no future in grapes

Australia’s biggest grape growing region is on the brink of collapse, with growers demanding an immediate moratorium on all new plantings as grape prices plunge.

Grape grower Jim Giahgias with some of his grapes in Loveday, Barmera, South Australia. Picture: Matt Turner

Australia’s biggest grape growing region is on the brink of collapse, with growers demanding an immediate moratorium on all new plantings as grape prices plunge from a high of $700 to just $150 a tonne.

The Riverland, Sunraysia and Riverina are trapped in a crisis of oversupply and reduced demand, with the huge plantings in the early 2000s creating a grape glut that has been worsened by the China trade war, lower alcohol consumption and reduced demand for old-style big reds.

The situation is so bad that hundreds of growers are threatening not only to dump their harvest but also to pull out their vines altogether and start growing different grapes or farming other crops.

South Australia’s Riverland is one of the hardest hit areas, with devastated growers who have worked the region for decades saying they see no future in grapes.

They believe they are being squeezed by the wineries that can benefit from cheap grapes and offset their own losses because of the Chinese tariff war.

Second-generation grape grower Jason Perrin told The Australian that the prices being paid were “completely unsustainable” and that growers were being sent to the wall.

“The prices we are being offered aren’t even close to being break even,” he said.

“We are at the point now where people are just thinking about packing it in.

“It almost feels like that’s what the wineries want as a way of reducing oversupply, by just driving people out of the industry.

“Riverland grape growers will not cop being used as the fall guys for an oversupply issue that has come about through government mis­management and in some cases the simple greed of corporate wineries.”

Second-generation grape grower Jason Perrin. Picture: Matt Turner

Tensions are running so hot in the Riverland that a blockade was held in the town of Loxton earlier this year where growers drove their trucks and tractors down the main street in protest at the $550 collapse in the price per tonne.

Growers in SA say the problem began in the early 2000s with an explosion in vineyard plantings on new land, fuelled by federal tax incentive schemes and supported by Mike Rann’s SA Labor government amid fears that potential investment in SA would be lost to Victoria and NSW.

The problem was exacerbated with a surge in the planting of company-owned vineyards by major winemakers.

The growers are now pleading for a moratorium from July 1 on all new plantings and a Jobkeeper-style scheme where Canberra would pay growers a break-even price of $300 a tonne to drop cabernet and shiraz grapes to the ground, to be removed and replanted with predominantly white grapes and some lighter red styles, or simply replaced with other crops.

The impact of the crisis is being felt at every level throughout the Riverland and has been particularly hard on the local Sikh community, of whom many settled in these small communities on a promise of a sustainable income through grapes.

SA independent MLC Frank Pangallo, who has a cousin who works in the region’s wine industry, travelled there last month to meet growers who fear they are going to the wall.

“Some have already decided not to sell to the big wine companies and are letting their crops rot on the ground,” Mr Pangallo told The Australian.

“One grower we met has already lost $50,000 so far doing this. Others will be forced to sell at these prices in order just to survive, to pay their mortgages and keep their houses.

“Some are second-generational growers. Others are Sikhs who have moved from India to start a new life. It really is a national tragedy what’s happening.”

Independent MLC Frank Pangallo. Picture NCA NewsWire/Emma Brasier

SA Primary Industries Minister Clare Scriven. Picture: Screenshot

SA Primary Industries Minister Clare Scriven said the state government was fully aware of how tough the situation had become for growers and had earmarked $300,000 to design and implement a 10-year strategy charting a future for the Riverland’s wine industry.

It has also launched the Resting Red Vines program offering growers savings of up to $2000 a hectare in input, water and management costs for red grape vineyards.

Ms Scriven conceded that more needed to be done and that a ­national approach was needed.

“The pressures on the local grape and wine industry are also being faced nationally, affecting wine regions across Australia,” she said.

“Global inflation, severe weather, including the devastating floods, and changes in consumer tastes have also had a large impact.

“Trade restrictions have been felt acutely, especially the loss of the huge China market following the former Coalition federal government’s damaging of the trade relationship.

“It is clear there is no ‘silver ­bullet’ solution.

“Multiple actions are needed and many are under way. I have also called for a national approach from the federal government.”

Ms Scriven said the one positive note was that there were promising signs the trade relationship with China would resume, revealing that she was leading a trade delegation to China this month with representatives from SA’s wine, agriculture and seafood industries, all of which have been smashed by the trade war.

Jaswinder Singh and Parmjit Singh Bagri in Glossop, South Australia. Many Sikh settled in small Riverland communities on a promise of a sustainable income through grapes. Picture: Matt Turner.

The SA wine industry was the hardest hit of all three, with wine exports to China standing at a $946.5m a year in October 2020 the month before tariffs were implemented by Beijing.

That accounted for 47 per cent of SA’s total wine exports, almost all of which was lost overnight.

Ms Scriven said off the back of visits to China by Anthony Albanese, Foreign Minister Penny Wong, Trade Minister Don Farrell and SA Premier Peter Malinauskas, she was hopeful there was a thawing of relations that would ­alleviate some of the pressure on growers.

“With cautious optimism that the tariffs on wine may be eased and the continued importance of China as an export market for South Australian wine and other agribusiness, it is critical we support the sector for a risk-managed re-engagement with China,” Ms Scriven said.