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Growers consider grape prices
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At the recent Hanwood Grape Growers Association meeting called by growers concerned with local grape prices, attendees were surveyed for what they considered would be a fair and reasonable price for key wine grape varieties. The results definitely show that on average vintage offers by many wineries are out of step with what the grower base considers as reasonable.
“Obviously wineries in general do not understand the level of concern that exists among growers in the region. They are either ignoring it or growers are not in a position to communicate these concerns directly to wineries. There is a real and present fear that if prices are not profitable this year then many will look in earnest to exit the industry, or sell water to inject capital into their depleted accounts” Mr Brian Simpson CEO Wine Grapes Marketing Board stated.
In response to Casella Wines General Manager Mr John Casella approach to the media earlier this month defending winery prices and stating that the Board needs to be more moderate while questioning its relevance, Mr Simpson said, “His comments have lead many growers to understand that without any representative body they are going to be operating in a more volatile market where they will not be able to speak out about prices and important issues.”
Mr Casella’s comments offended some growers with the Board office fielding complaints about his thoughts on the industry, of particular concern was that growers need to reduce their on farm costs. They believe they are and current returns are not aiding their viability. Mr Casella also named some old wineries that had disappeared from the region as a signal that not all is well within the wine industry.
“The numbers of small to medium wineries have expanded rapidly in Australia in the past 10 years and there were obviously going to be winners and losers as cautioned years ago by the Winemakers Federation of Australia their federal representative body and other industry bodies,” stated Mr Simpson questioning the relevance, “What Mr Casella stated could be misleading to the general reader as he did not advise that these wineries were either taken over or purchased and to this day continue to be operational.”
“It appears that local wineries have been offended by the tone of media generated headlines more than the content as evidenced by the lack of response by the local winemakers association to the issues raised by the Board, with them preferring to ridicule myself as the Board spokesman instead of responding constructively as has been the case in past years,” Mr Simpson advised.
“It is part of the Board’s role to represent growers in the promotion of contracts and advising a grower to look to exercise their rights under a contract is integral to this representation. The Riverina region has a low adoption of agreed industry best practice when it comes to contract content and this could work to the detriment of local processors as it generates tension and distrust. This is especially relevant where growers are faced with no opportunity under some current contracts to negotiate effectively. The Hanwood Association meeting raised this as a point of concern and steps are currently being investigated as to how growers can get some control into their business”.
The prices per tonne that growers considered at the meeting as being fair and reasonable this season were: Chardonnay $570, Colombard $470, Muscat Gordo $495, Riesling $540, Pinot Gris $750, Sauvignon Blanc $770, Semillon $530, Cabernet Sauvignon $700, Durif $700, Merlot $700, Ruby Cabernet $520, Shiraz $680, Pinot Noir $700, Trebbiano $480, Marsanne $530, Red Frontignac $500, Petit Verdot $525, Traminer $650, Grenache $500.
While it is understood that some growers are fortunately obtaining prices greater than these it is hoped that these would optimally become the average prices received across the region.
“The message was quite simple growers want their business to be profitable and that of their wineries. They are not motivated by greed but a need to remain viable,” Mr Simpson stated, “I can confidently say that all growers that attended the meeting were very supportive of the manner in which the Board had operated this season representing them as they resolved that the Board continue regardless of expected negative winery response.”