Should Australia impose a moratorium on vine plantings?

Riverland grape growers are calling for a moratorium on the planting of grapevines. The new demands represent a continuation of the region’s ongoing struggle against economic difficulties, with a recent meeting between growers and state government revealing that the region is fast approaching breaking point. 

The Riverland winemakers promoting the moratorium say it is a necessary solution to solving the current oversupply of red wine grapes. As it stands, wineries have been offering Riverland grape growers rates as low as $120 per tonne, less than half the cost of production.

The moratorium has also been pitched as a way of balancing out the disadvantage currently faced by smaller producers unable to streamline costs to the same extent. Despite the truth to this, it is worth noting that larger producers are also feeling the effects of the current trading climate. Included in this is Salena Estate's recent entry into administration as a result of financial difficulties. 

One reason for the problem is Australia’s plummeting wine export figures. The latest available data from Wine Australia recorded a decrease in both value and volume throughout 2023. 

“The decline in exports to Europe and North America has resulted in their share of export value dropping to 29 and 27 per cent respectively. Meanwhile, Asia’s share of export value has grown to 37 per cent,” said Peter Bailey, Wine Australia Manager – Market Insights.

While much of the industry is eagerly banking on a return to the Chinese market as an approaching solution to Australia’s oversupply crisis, esteemed wine critic Jeremy Oliver doesn’t think it will be enough.

“All the discussions that I read about how to solve the industry's problems right now, they're all related to, well, how do we sell our excess? How do we market our way out of this?” he said.  

“Well, the whole world is in an oversupply of wine, not just Australia. There's nowhere waiting to intercept all the wine we need to get rid of: that market does not exist! And if it does exist, it's got the rest of the world queuing up… what makes us think we're going to get ahead of everyone else?”

It has been reported that Australian winemakers have been aware of the approaching red wine grape oversupply since as early as 2004. The industry’s continued failure to act on the issue has directly resulted in the situation that Riverland is facing today. 

“These are really troubling thoughts and the industry has to address them,” said Oliver.

“It's never been, as I say, in a worse condition in my time of following it seriously.”

While a moratorium could contribute to alleviating some industry stress, more significant change will likely be required for Australian wine to fully resolve the issue.

“I've been saying for some time that if you ripped up half the vines in Australia for wine making - and if I, and a few other people who had similar views to me, were in charge of which half were ripped out - no one would know," said Jeremy Oliver.