State and Federal Governments announce $2.5m SA Wine Recovery Program

Today, Federal and South Australia State Governments have announced a new $2.5 million wine industry support program developed using recommendations made by the Viticulture and Wine Sector Working Group. Once implemented, the SA Wine Recovery Program will seek to facilitate the recuperation of the state’s wine sector from the impacts of adverse events and market disruptions experienced over recent years.

“The Albanese Labor Government is committed to supporting the long-term viability of industry by focusing on underlying concerns,” said Julie Collins, Minister for Agriculture, Fisheries and Forestry.

“Today’s announcement is an important part of responding to the Viticulture and Wine Working group. Together, initiatives and recommendations outlined in the report will help support and strengthen our sector.”

The Viticulture and Wine Sector Working Group was established by Australia’s Agricultural Ministers on 8 March at the first Agriculture Ministers' Meeting of 2024. The group has since conducted a series of national consultations with industry to better grasp the issues currently being faced by the sector. More recently, it finalised its report, which outlines key issues government and industry should work together to resolve.

“Feedback from most stakeholders was that there are too many red wine grapes being produced in Australia and too much red wine in storage,” wrote the group in its report.

“The Working Group heard a variety of views on the contributing factors that had led to the current situation including previous government policy decisions, winery contracts that encourage overproduction, loss of the China market, declining global consumption of red wine and not enough response to market signals by industry.”

The $2.5 million SA Wine Recovery Program will focus on targeting vineyard waste management, building domestic demand, and regional grape and wine capability.

In the report, the working group identified that “waste streams were also noted as a key issue if growers were to exit the industry. In the Riverland region, stakeholders highlighted that there are no disposal options for Copper Chrome Arsenic (CCA) posts, drippers, and wires. These stakeholders suggested that government support may be needed to assist, including financial assistance with the costs of disposal. Engagement with local councils was suggested to investigate disposal options.”

Additionally, “increasing the demand and reputation of Australian wine in existing (including domestic) and new markets was conveyed to the Working Group as a key priority in redressing the imbalance in supply and demand.”

The report says focusing on premium wine and adjusting current taxation settings were both solutions proposed by industry stakeholders.

Regarding the SA Wine Recovery Program’s third focus area, the report wrote that “some stakeholders highlighted concerns that industry representation at the national and regional level did not adequately represent the sector’s diverse participants. The Working Group heard from some growers and commercial wine producers that their views were underrepresented in strategic planning, advocacy, policy making, and that a disproportionate focus was placed on the premium sector and winemakers. Some of these concerns could be attributed to the loss of a ‘grower-specific’ national body, and the consolidation of national wine organisations in the 2010s which saw reductions in staffing levels and leadership figures for parts of the sector.”

Minister for Primary Industries and Regional Development Clare Scriven says the $2.5 million SA Wine Recovery Program will seek to alleviate some of the major pressures identified by the working group.

“This investment will further assist in addressing some of the key issues in South Australia raised through the national Viticulture and Wine Sector Working Group that I initiated earlier in the year,” she said.

“The Malinauskas Government is committed to supporting our $1.93 billion wine and grape sector which has undergone significant challenges in recent years.”

The SA Wine Recovery Program follows on from a series of other government support packages made available to Australia’s wine sector over the past 23 months. This includes Federal Government initiatives such as the $3.5 million Grape and Wine Sector Long-term Viability Support Package and the extension of the Wine Tourism and Cellar Door Grant Program; and State Government initiatives such as a $260,000 grant to Riverland growers looking to exit the industry, $1,500 immediate grants for Rural Business Support, and these State Government wine export programs announced following the lifting of tariffs on wine imports into China.