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Something to really wine about

Harvesting is in full swing in almost every vineyard across eastern Australia and this year, more than ever, it is a race to get ripened grapes picked in time.

An early spring and erratic summer weather meant harvesting in some regions began a month earlier than usual.

In most wine regions it is likely to be finished weeks earlier than normal.

But in the inland wine producing regions some growers will not bother to harvest their grapes as Australia’s wine industry faces a period of rationalisation.

Growers who do not have contracts to sell their harvest to wineries face the prospect of unwanted fruit — another year of financial loss.

“Probably 90 per cent of the growers that we have got on our booking list have are non-contracted growers,” said Louise Belej, who owns and operates a contract harvesting business.

At the present time, $150 a tonne – growers just can’t sustain their livelihood and cost of production; just not viable.

Louise Belej, owner and operator of a contract harvesting business

“And their reds are probably going to sit on the vines, because there’s no home for them.”

For many growers the 2015 vintage will be a tipping point and another year of poor prices will send some to the wall.

“We’re increasingly losing growers to the industry,” chief executive of the Murray Valley Winegrowers Mike Stone said.

“Last year after the 2014 vintage we lost about 60 growers from our database, meaning we lost about 700 hectares.

“And this year from what I’m hearing, we’re going to lose a lot more.”

The sobering outlook for wine grape producers is due to a range of factors — the recent high Australian dollar that impeded exports, an oversupply of some grape varieties and the trend of wineries to run their own vineyards.

Price of grapes below production costs

It means that in many cases the price for wine grapes is below the cost of production.

“At the present time, [wine grapes are] $150 a tonne — growers just can’t sustain their livelihood and cost of production; just not viable,” Ms Belej said.

A few years ago her contract harvesting business needed four machines to keep up with demand. Now the Belej family has just the one.

The number of growers on their books has dropped off.

The couple are reaching retirement age and are keen to leave the industry, but none of their children want to come back on the farm.

The farm and their business has been on the market for four years.

Wine growers in some regions will leave their grapes on the vine this harvesting period.

Some growers won’t bother harvesting this year’s crop. Photo: ABC

Last year the Murray Valley wine harvest was down by 10 per cent in volume and more than 20 per cent in value. This year it is even worse.

According to Mr Stone, wine grape prices this year are the worst they have been in around seven years.

“And in fact, apart from a blip in 2008, they’ve been the worst for about 10 years,” he said.

The economic squeeze is not confined to the Murray Valley region.

“There was a survey done for the Winemakers’ Federation after the 2014 harvest, which showed that more than 90 per cent of inland region grape growers, grape vineyards were unprofitable, and around Australia more than 80 per cent were unprofitable,” Mr Stone said.

“It’s tough. The wine industry is still going through a fairly tough phase,” said Thomas Jung, general manager of Winemaking at Australian Vintage Limited at Buronga on the Victorian and New South Wales border.

The winery, the third largest in Australia, annually crushes about 10 per cent of Australia’s wine grapes.

At present the plant is running at full tilt. The early ripening of fruit has meant red grapes, which are late to mature, have had be harvested alongside white varieties.

“So it has put lots of stress on our staff, plant and equipment. Our guys have been going gangbusters to deal with this year’s harvest,” Mr Jung said.

Exodus of growers from industry

A decade ago the Murray Valley region had more than 1,000 wine grape producers.

The number is now 440 and falling annually as more growers exit the industry.

We keep thinking ‘when’s this bubble going to burst and when things are going to turn around?’

Louise Bejel, contract harvesting business owner

Those that remain have generally got bigger but throughout the region dead vines are a common sight.

“We’re also increasingly part of the global wine market,” Mr Stone said.

“Our commodity wine, our commercial sector which is this region, the Riverland and Riverina in New South Wales, we’re increasingly in competition with Chile, South Africa, Argentina, the really big regions of Spain, France and so forth. So it’s tough out there.”

The recent fall in the Australian dollar will bolster wine exports, but for some wineries that will come too late.

“There are some wineries that are struggling and there’s been rationalisation occurring at that end too,” Mr Stone said.

“Hopefully everyone can get through this but increasingly we are seeing signs that [for] the smaller operators, 2015 is going to be their last vintage.”

Ms Belej says she will stick it out for one more year in the hope that next year the margins will be better.

“We keep thinking ‘when’s this bubble going to burst and when things are going to turn around?'”

 

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