By Deborah Jackson, editor National Liquor News

Many Victorian grape growers are feeling the squeeze as the average price of major red grape varieties drops below $300 a tonne – the lowest in a decade.

Data provided by wineries to Wine Australia for the Murray-Darling/Swan Hill Wine Grape Crush Report reveals average prices for Cabernet Sauvignon of $295 a tonne (a drop of 10 per cent), Merlot $293 a tonne (dropping five per cent) and Shiraz $289 a tonne (dropping eight per cent). 

Of white varieties, Pinot Gris recorded a solid gain of 10 per cent to $530 a tonne while Chardonnay nudged up three per cent to $223 a tonne and Sauvignon Blanc rose two per cent to $319 a tonne.

Grape grower earnings plunged 15 per cent on last year, leading Murray Valley Winegrowers to warn of a farmer exodus from the industry.

A decade ago prices were around $500 a tonne.

Whether or not this ratio remains will be revealed when the Winemakers’ Federation of Australia releases the National Vintage Report on July 17.

Mike Stone, executive officer of Murray Valley winegrowers (MVW), said more growers will be forced out of the industry this year as a result of another season of prices that generally failed to cover production costs. 

He said the capacity of growers to “hang on” until market conditions improved was limited, even though prospects had improved on several fronts.

“The lower Australian dollar, particularly in North American markets, and recently signed free trade agreements, will assist in boosting export sales.  

"Wine Australia successfully promotes our wines internationally, but could do a lot more with additional funds; submissions from the grape and wine sector to the Federal Government have recommended tax reform measures as a means of diverting extra funds to Wine Australia.”

Ross Brown, executive director of Brown Brothers told TheShout: “Our view is that we want to see grape prices level to make a sustainable industry and we see some light at the end of the tunnel with the exchange rate now dropping down to 75 cents, it puts us back in the game for export.

"The price compression for grapes is really incurred off the back of a collapsed export market for Australian wine and I would hope this is absolutely the low point and with stronger exports you’ll start to see the industry getting back to a sustainable grape growing winemaking proposition.” 

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The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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