© Reuters. Unpicked grapes wither on the vine close to the city of Griffith in southeast Australia, February 26, 2024. REUTERS/Peter Hobson/File Photograph
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By Peter Hobson
GRIFFITH, Australia (Reuters) – Hundreds of thousands of vines are being destroyed in Australia and tens of hundreds of thousands extra have to be pulled as much as rein in overproduction that has crushed grape costs and threatens the livelihoods of growers and wine makers.
Falling consumption of wine worldwide has hit Australia notably arduous as demand shrinks quickest for the cheaper reds which can be its largest product, and in China, the promote it has relied on for progress till current years.
The world’s fifth largest exporter of wine had greater than two billion litres, or about two years’ value of manufacturing, in storage in mid-2023, the latest figures present, and a few is spoiling as homeowners rush to eliminate it at any value.
“There’s solely so lengthy we are able to go on rising a crop and shedding cash on it,” mentioned fourth-generation grower James Cremasco, as he watched clanking yellow excavators strip out rows of vines his grandfather planted close to the southeastern city of Griffith.
About two-thirds of Australia’s wine grapes are grown in irrigated inland areas similar to Griffith, its panorama formed by vine-growing strategies introduced by Italian migrants arriving across the Fifties.
As main wine makers similar to Treasury Wines and Carlyle Group (NASDAQ:)’s Accolade Wines refocus on costlier bottles which can be promoting higher, the areas round Griffith are struggling, with unpicked grapes shrivelling on vines.
“It seems like an period is ending,” mentioned Andrew Calabria, a third-generation winery proprietor and wine maker at Calabria Wines.
“It is arduous for growers to look out the again window and see a pile of grime as an alternative of vines which have been there so long as they’ve identified.”
Close by, the stays of 1.1 million vines that after comprised one among Australia’s largest vineyards had been piled in heaps of gnarled and twisted wooden so far as the attention might see.
Pink wine has suffered probably the most. In areas like Griffith, costs of the grapes going into it fell to a median of A$304 ($200) a ton final 12 months, the bottom in many years and down from A$659 in 2020, knowledge from trade physique Wine Australia present.
The federal government, which forecasts decrease costs once more this 12 months, mentioned it recognises the numerous challenges dealing with growers and is dedicated to supporting the sector, although many growers say it may well do extra.
Cremasco mentioned a few of his pink grapes offered for little greater than A$100 a ton.
To stability the market and raise costs, as much as 1 / 4 of the vines in areas similar to Griffith have to be pulled up, mentioned Jeremy Cass, head of Riverina Winegrape Growers, a farmers’ group there.
That will destroy greater than 20 million vines throughout 12,000 hectares (30,000 acres), Reuters calculations based mostly on Wine Australia knowledge present, or about 8% of Australia’s complete space below vine.
Growers and winemakers in different areas have additionally been pulling out vines.
“If half the vines in Australia had been ripped out, it nonetheless won’t clear up the oversupply,” mentioned a wine maker in Western Australia.
Nonetheless, many growers unwilling to tug up vines are shedding cash whereas hoping for the market to show round.
“It is chewing up wealth,” mentioned KPMG wine analyst Tim Mableson, who estimates that 20,000 hectares (49,000 acres) of vines should be taken out nationwide.
GIVING IT AWAY
Well being issues are prompting shoppers worldwide to drink much less alcohol and once they do drink wine, they decide pricier bottles.
Chile, France and america are among the many different giant wine producers additionally grappling with oversupply, with even prime areas similar to Bordeaux uprooting 1000’s of hectares of vines.
When China blocked imports throughout a political dispute in 2020, Australia misplaced its largest wine export market by worth. And in contrast to Europe, it gives farmers no monetary support to assist them destroy vines and extra wine.
Though China is predicted to permit imports once more this month, that won’t mop up the glut, as demand there has fallen rather more quickly than elsewhere.
Wine offered for lower than A$10 a litre – most of it made out of grapes grown in areas like Griffith – accounted for two-thirds of the worth of Australian wine exports value A$1.9 billion within the 12 months to December 2023, Wine Australia says.
Some areas are faring higher, similar to Tasmania and the Yarra Valley in Victoria, which produce extra white wines and lighter, costlier reds which can be rising in reputation.
However throughout Griffith there are clusters of metallic storage tanks, every holding 1000’s of litres.
“Everyone seems to be attempting to clear wine,” mentioned Invoice Calabria, Andrew’s father, including that wineries had been “all however giving it away” to make room for the incoming classic.
Many growers are turning to citrus and nut timber as an alternative.
Cremasco hopes for larger income from the prune timber he’s planting in his grubbed-up acreage, whereas GoFARM, a company, is placing in additional than 600 hectares (1,500 acres) of almonds close by, additionally changing vines.
“There will be no subsequent technology of household grape growers,” Cremasco added. “It’s going to be all large corporates, and all of the native younger guys might be working for them.”
($1=1.5225 Australian {dollars})
