Winegrape prices: Chinese tariffs, freight costs means rotting grapes

Growers in the Murray Valley are facing the prospect of not picking their winegrapes as prices slump by 40 per cent.

Winegrape growers are facing the prospect of leaving fruit to rot rather than chasing their losses as farmgate prices slump by 40 per cent.

Robinvale grower Phillip Englefield said red winegrape varieties for which growers got $550 a tonne last season were now down to between $300/t and $330/t.

“The real crunch is we’ll have significant quantities of fruit that won’t sell,” Mr Englefield said.

Last year’s record 2.1 million tonne grape harvest is still sitting in wineries tanks as growers try to find a home for another 1.7m tonnes they will pick this season.

Bulk wine specialist Jim Moularadellis said the triple whammy of losing the Chinese market, a doubling of shipping costs and Covid restrictions had led to the slump.

“Barring a climatic disaster, significant volumes of red grapes are likely to be left unpicked this vintage. This is the first time grapes will not be harvested for several years,” Mr Moularadellis said.

“Buyers are shedding uncontracted supply of red grapes. This includes buyers that had little direct exposure to China, since the loss of this market has impacted all wineries.

“White prices are OK, but under the same pressure.”

Murray Valley Winegrowers chair Chris Dent says growers are facing leaving their red wine grapes on the vine to rot this year, with price for red wine plummeting after China slapped steep tariffs on Australian wine imports. Picture: Zoe Phillips

Murray Valley Winegrowers chairman Chris Dent said “with prices for contracted reds deteriorating (almost half of what they were 2 years ago), and in some instances uncontracted fruit being hard to sell, our growers in the Murray Valley are facing another difficult year.

“We had hoped this type of situation was behind us following a few reasonable years of high demand and pleasing prices.

“Unfortunately this is an all too familiar situation for us, but as growers and farmers we are a resilient bunch and we will battle through these latest challenges as we have done before.

“Sadly there may be some causalities that cannot afford to go on, through no fault of their own, and our hearts and thoughts are with them.

Despite the implications of leaving grapes to rot, Chris has faith, calling farmers and growers a “resilient bunch”. Picture: Zoe Phillips

“Thankfully, despite the ongoing challenges, we are hopeful that white varietals which are generally in demand and make up 50 per cent of grapes grown in the Murray Valley will help offset the slump in red prices and carry growers through this year’s harvest.”

The Australian Grape and Wine industry group reported this month that many wineries still had tanks full of wine left over from last season’s record 2.1 million harvest, creating a glut in the market.

“It is essential that these troublesome market forces don’t impinge upon fair and equitable grape purchasing practices,” AGW reported.

“Winegrape grower winemaker relationships should remain respectful, with consideration for the best interests of both parties.”

The Australian Competition and Consumer Commission has also put the industry on notice that it will be monitoring the sector in light of its 2019 winegrape market study, paying particular attention to potential breaches of the Competition and Consumer Act 2010 and any other behaviours that may be preventing the functioning of competitive markets.