The Riverland wine-growing region in southern Australia is in the middle of an unprecedented crisis. Many local growers are affected by an oversupply of red wine and increasing prices, endangering their livelihoods. Recent drought conditions have only exacerbated the challenges looming over these farmers, forcing some to make tough calls on their vineyards. Amanda Dimas, a local grower, has started replacing her traditional vines with more profitable varieties due to the uncertainties in the water market, reflecting a broader trend of adaptation within the industry.
Greg McCarron oversees the Central Irrigation Trust, an important water supplier to Riverland irrigators. In addition to depressed values, he notes that the world growers are stepping into is a much more complicated supply and demand environment in the water market. As prices for popular varieties such as shiraz, cabernet, and merlot reach record lows globally, many in the region are questioning their future in wine production.
The ongoing drought continues to impact parts of southern Australia, with growers expressing frustration over the lack of support from state government officials. Clare Scriven, a local government official, described the need for immediate “structural changes” to the wine industry. She stressed that as long as the government isn’t willing to back vine pulls, struggling farmers won’t have the relief they need.
The Economic Strain on Growers
The economic pressures on Riverland wine grower have increased over recent months. Prices for red wine grapes have dropped dramatically. Growers are now only getting 20 cents per each bottle sold, something Jack Papageorgiou points out is likely much lower than the cost of the cork. Yet with costs escalating and profits disappearing, too many are forced to close up shop.
Amanda Dimas articulated the frustration felt by many growers: “There’s been no return for so many years now, and I think this is the nail in the coffin.” The financial pressure is clear too, with the cost of removing vines from the earth hovering mid-flight at approximately AUD 7,000 per hectare. The high cost (about $105 per vine) she says keeps many from doing anything even when they can’t afford it.
Another grower, Jim Giahgias, expressed his mounting concerns: “We can’t take anymore, we’re at breaking point now.” He’s even thinking of uprooting his red grape vines after continued financial hardships. Giahgias further emphasized the need for a coordinated approach to vineyard removals, saying, “If the decision is to remove vineyards, to help the industry, I believe it has to be legislated … one grower can’t be pulling while the other is planting.”
Water Market Challenges
The intricacies of the water market have become yet another key factor impacting Riverland growers. In neighboring South Australia, penalties for water overuse are astronomically high. These rates, they claim, are at least three times their current market price for selling or purchasing water. Deprived of sufficient supply, this has created an untenable circumstance for farmers whose need for irrigation exceeds their share of the allocation.
“Their metres have been locked, and they can’t irrigate the vineyards unless they go to the marketplace and lease the water.” Farmers should not suffer severe financial consequences for failing to meet water standards, a burden that heaps more stress on their high-pressure enterprises.
Greg McCarron highlighted the gravity of this situation: “Non-compliance from farmers … can result in us not being able to balance our water accounts with the state government and face significant overuse fines.” This tenuous equilibrium deepens the uncertainty for the many who already find themselves under pressure to keep their vineyards alive.
Calls for Support and Legislative Action
The need for immediate financial assistance and an organized exit plan has been more and more evident within Riverland’s viticultural community. New exits needed Alexandra Cannon, general manager of Riverland Wine, says that it’s important to give growers pathways out of the industry. She is convinced that if growers are not sufficiently supported many will be ruined.
Cannon cautioned that political support for exit packages upfront is critical. Without it, this region is headed towards a major trainwreck. The sentiment among many growers reflects a shared understanding that without intervention or support from the government, their futures remain uncertain.
Clare Scriven acknowledged the complexities involved, stating, “It’s not necessarily a matter of government intervention; it’s a matter of industry continuing to work through the issues.” Her statements on the efficacy of vine pulls elicited a variety of responses. She noted that “vine pulls generally do not have a positive impact on long-term sustainability of the industry,” suggesting that alternative solutions may be necessary.
At home, local farmers told stories to similar lines that we heard in Spain and France. Many of them are eliminating vines for this reason. They’re being forced by market pressures to do so. As Riverland growers face these painful truths, their pleas for help become more desperate.
