CANBERRA, Australia: Australian farmers are destroying millions of vines and are planning to pull out millions more to reverse overproduction, has driven down grape prices and threatened the livelihoods of growers and winemakers.
With demand dropping fastest for the cheaper reds that are its biggest product, most notably in major market China, the global consumption of wine has hit world’s fifth largest exporter especially hard.
The world’s fifth largest exporter of wine had more than two billion liters, or about two years’ worth of production, in storage in mid-2023, the most recent figures show, and some is spoiling as owners rush to dispose of it at any price.
James Cremasco, a fourth-generation grower in the southeastern town of Griffith, said, “There is only so long we can go on growing a crop and losing money on it.”
Some two-thirds of Australia’s wine grapes are grown in irrigated inland areas, such as Griffith, where the remains of 1.1 million vines from one of Australia’s largest vineyards were pulled out.
Red wine has suffered the most from the slow demand, with data from industry body Wine Australia showing that in regions like Griffith, grape prices fell to an average of A$304 (US$200) per ton last year, the lowest in decades and down from A$659 in 2020.
In forecasting lower growth this year, Canberra said it recognizes that growers face significant challenges, and it is committed to supporting the sector.
Jeremy Cass, head of local farmers’ group Riverina Winegrape Growers, said that to balance the market and increase prices, up to a quarter of the vines in areas such as Griffith must be pulled up, which would destroy more than 20 million vines across 12,000 hectares (30,000 acres), or some 8% of Australia’s total area under vine.
However, many growers hope the market turns around and are unwilling to destroy their vines.
“It is chewing up wealth,” said KPMG wine analyst Tim Mableson, who estimates 20,000 hectares (49,000 acres) of vines need to be pulled out in Australia.
Other major wine producers, including Chile, France, and the U.S., are also grappling with oversupply, and even famous wine-growing regions, such as Bordeaux, are destroying thousands of hectares of vines.
