Indicative red wine grape prices down more than 10 per cent, but whites up just as much

Some wineries have released indicative prices for the coming harvest. Here’s how both red and white grapes look to fare.

Indicative wine grape prices for the 2021 harvest have been released. Picture: Ben Searcy

A FEARED drop in red wine grape prices appears to be playing out, with some wineries offering growers prices more than 10 per cent lower than last year following concerns China’s new tariffs on Australian bottled wine will dampen demand.

White wine grape prices are, however, up by about 10 per cent, potentially balancing out the predicted losses for growers with diverse crops.

Wineries that are signatories to the wine industry’s code of conduct must provide their growers in the Murray Valley, Riverland, Riverina and Hunter Valley with an indicative price before December 15.

These include most of Australia’s biggest wineries including Treasury Wine Estates, Pernod-Ricard, Accolade Wines and Brown Brothers.

Inland Wine Regions Alliance chair Jim Caddy said red wine grape varieties were down by about $100.

“We’re disappointed, we don’t think that big a drop for the reds is justified, and we thought the increase for whites is not enough,” Mr Caddy said. “We encourage growers to discuss prices with their winemakers.”

In the Murray Darling and Swan Hill region, shiraz and cabernet sauvignon grapes from this year’s harvest fetched about $600 a tonne, a 10-year high after a prolonged grape glut.

One industry source said indicative prices were generally a starting point, and would rise early in the new year. They said demand for white grapes would be high, pushing prices up further.

Wine exports to China are almost exclusively red wine and there were concerns among some growers of unpackaged wine that wineries were offering reduced prices despite the Chinese tariffs of up to 212 per cent only applying to bottled wine.

Growers and wineries in cooler climate regions, whose wine is more likely to end up in China and at greater volumes, are more exposed to the tariffs, and the fear is they will be forced sell at discounted prices to get rid of stock that was bound for China, which could depress prices industry-wide.

The wine grape industry is urging growers not to panic and accept low prices given there is very little stock due to two years of below-average vintages, and strong sales volumes over the past year.

The Australian Competition and Consumer Commission released its final report into competition in the wine grape industry late last year that recommended greater transparency around pricing.

A revised voluntary code of conduct was released in October but Murray Valley Winegrowers executive officer Paul Derrico said it didn’t go far enough in giving growers an indication of the prices they’ll receive early enough in the season.

“Growers put time, effort and cost into producing a crop and are only finding out just before harvest what they might be paid,” he said.

MORE

LOCAL WINE NAMED ON US TOP 100 LIST

HEALTHY BERRY CROP COMES WITH LABOUR WOES

MUSHROOM LEVY VOTE IS IN