South Australia
SA White House Grape Prices Hit Rock Bottom
Prices for Australian white wine grapes are expected to collapse this vintage because of oversupply. Riverland growers may see prices drop to $80-$120 per tonne while production expenses are, above $350. Those who switched from red to varieties now confront yet another challenge. Amanda Dimas replaced shiraz with chardonnay. Describes the situation as a harsh blow. Riverland Wine sent a letter to Premier Malinauskas describing the circumstances as disastrous. The state government is reviewing the appeal. Has committed $15m to support initiatives. Diversification to other crops faces risks of creating new oversupply problems.
Grape producers in South Australia are encountering a challenge. Prices for white wine grapes are set to decline due to a supply this vintage season. Growers in the Riverland, Australia's wine grape-producing area, fear they may need to abandon their farms. For the past five years, the wine sector, throughout Australia, has struggled with a worldwide surplus of red wine grapes. This occurred as global markets shifted and consumer preferences evolved. White grapes are now following the path.
How Bad the Prices Are
Initial price signals for the 2026 vintage in South Australia's Riverland indicate shiraz prices ranging from $80 to $120 per tonne. Riverland Wine reports that producing grapes costs over $350 per tonne. As a result, growers incur losses on each tonne sold. It was anticipated that red grape prices would remain low. Now the sector is bracing for a decline in white grape prices as well. White grape types such as chardonnay and sauvignon blanc were intended as a solution for producers to endure the decrease in varieties in recent times. However, that strategy has now failed.
Amanda Dimas’s family has cultivated grapes on their land for three generations. She mentioned that farmers no longer have funds to diversify or alter their crops. Even if they managed to do white grapes have deteriorated significantly. Dimas uprooted all her Shiraz vines. Swapped them for chardonnay. She refers to this surplus of grapes as yet another blow. Despite investing her earned cash to make a change, it didn't lead to any progress.
The Reason Behind This Occurrence
The Wine Group, located in Loxton, processes grapes. General manager Brigid Nolan mentioned that some growers switched to planting grapes due to the decline in red grape demand. Currently, there is also a supply of those white grapes. Unlike other farming sectors, in Australia, wine grapes apparently do not adhere to cyclical patterns. Eventually, the situation becomes financially unsustainable. Nolan stated that we will begin to witness the consequences of this with some vines and vineyards appearing quite distressed and unhealthy.
Government Help
Riverland Wine sent a letter to Premier Peter Malinauskas. The letter characterises the area as undergoing an economic and social emergency. They are requesting a government-organised crisis meeting involving industry groups, peak bodies and grower representatives, before the close of January. The letter cautions that the danger of doing nothing is now disastrous. It stated that at this moment, the Riverland is collapsing.
Peter Hill serves on the board of Riverland Wine. He mentioned that South Australias reputation as a wine region is endangered unless the government intervenes. The future appears disastrous, affecting not only the sector but also the entire community and state. Hill noted that you only need to visit locations, like Barossa, Clare, McLaren Vale or Langhorne Creek to hear the concerns. These areas are facing difficulties. The wine sector is a part of South Australia's economy. Hill believes that ought to draw the premiers' assistance.
The state government stated that it received the appeal from Riverland Wine and is reviewing it. They recognised the circumstances the industry is currently facing. Several initiatives have been launched by the Department of Primary Industries involving funding of $15 million. The South Australian Wine Recovery Program, with $2.5 million allocated, aims to assist in managing vineyard waste, whether neglected or cleared. Additionally, a national vineyard register exists to help guide supply and demand decisions. Last week, the state government declared a third series of rebates to motivate growers to pause their vines this season.
Other Options Running Out
Industry voices have also urged cultivating a variety of crops to reduce dependence on wine grapes among growers. Ashley Ratcliff, proprietor of Ricca Terra Wines in Barmera, has broadened his plantings to include olives and agave. Ratcliff noted that although this is an alternative, it carries the danger of surplus in sectors as well. Introducing quantities of products, like olives, almonds or pistachios, can equally saturate the market.
Hill mentioned that diversifying crops isn’t simple either. No matter the choice, replanting involves expenses. Growers’ financial means are now depleted, following three years of prices below production costs. Without assistance, the next move will be growers abandoning their lands.
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