Struggling commercial red grape growers crushed by yield caps

Australia’s commercial red wine grape industry has fallen further into crisis, with winemakers placing a huge cap on yields.

Australian commercial red grape growers have received the crushing news that vineyards will not be taking up to 40 per cent of their crops.

It is a further blow for an industry in a heavy downturn that is expected to continue until at least the end of 2024, driven by global problems including China imposing punitive tariffs on Australian imports in late 2020 and a Covid-related shipping crisis.

Australian Grape and Wine chief executive Tony Battaglene said the situation could reduce the nation’s 2023 red grape crush by about 200,000 tonnes, after the 2022 crush fell by the same amount to 959,131 tonnes after this year’s harvest.

Red grape growers have received more bad news. Picture: Zoe Phillips

“The general trend, at least for inland regions, appears to be about 40 per cent less reds than last year is the number people think they will need because there is a lot of product in tank at the moment and they cannot send it offshore,” he said.

“There is going to be a lot of pain.”

Although the white wine industry and some red producers remain insulated from the crisis, commercial red growers in warmer, inland regions have been heavily affected.

Mr Battaglene said the price paid to red grape growers for the coming crop could fall by up 20 to 30 per cent on what they received for this year’s yield.

Grower-owned Murray Valley Winegrowers Incorporated chief executive Paul Derrico said prices paid to inland red grape growers last season was already half of what they received in 2020.

He also said growers without contracts with wineries this year would not be able to sell red grapes.

Sunraysia growers were forced to dump more than 20,000 tonnes of red varieties in April.

Growers are having to either ride out the crisis and reduce operating costs, pull out vines or sell the farm.

MVWI chairman Chris Dent called on all wineries to be upfront with growers in terms of the yield they were prepared to take for the coming season.

The market price wineries pay growers is announced in early December, while harvest begins mid-January.

“As tough as it is, it gives us some control over our destiny in terms of what to invest,” he said.

“But it is deflating to come through a long, tough period, only to get a couple of good years and here we are back into it. I can see our grower footprint reducing, sadly.”