Back to Industry News List >>

Feb 9, 2011

THE party may be over for the wine-loving consumers addicted to low prices for their favourite tipple.

"The industry is going broke,'' Australian Wine Grape Growers Association executive director Lawrie Stanford said.

"Prices last year were presumably rock bottom and certainly unsustainable in the main.''

He said Australians had been in a "privileged'' situation for years with prices driven down due to a wine glut.

Pressure on winemakers to produce wine at low prices for supermarkets meant growers were being paid less than the cost of production.

Mr Stanford said about 13,000ha of grapes had been pulled up Australia-wide in 2010, while growers of an additional 8000ha of vineyards had either not harvested or let their fruit drop.

"It's the largest number left uncropped as far as I know,'' he said.

Bulk shipments were sent overseas with the intention of clearing excess stock.

According to the Australian Bureau of Statistics, the total grape crush for 2009-10 was 1.6 million tonnes, down 7.5 per cent on the previous year.

This year's spread of disease, such as downy and powdery mildew, will reduce the 2011 crop further, easing the glut of the past few years.

"While prices will not return this year to the levels they were at some five to 10 years ago, based on the supply and demand fundamentals this season, they must improve on last year,'' Mr Stanford said.

In 2010, some retailers were selling wine for as little as $5 a bottle, while "cleanskins'', a generic labelled bottle that doesn't identify the winery or winemaker, could be found for as little as $2.

"These low prices are unsustainable and if the prices available to consumers at the moment continue to remain low, grape growers and wineries will go out of business,'' Mr Stanford said.

"And consumers won't be able to find some of their favourite local wines.''