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Grape price movement in region brings glimmer of hope

Initial low price offers for wine grapes across the Riverina have shocked wine grape producers. According to growers the market signals were not clear that the price would fall away as far as it has. Contributing causes to the fall are the effect of growers without either formal agreements or secure written contracts being cast adrift by some locally based wineries and even more notably in the Riverland (SA) and Murray Valley (NSW/VIC) inland regions and the consistent vagary of the levels of wine stocks the industry is carrying nationally.

“In light of what is occurring in other regions the Board can report that a local family owned winery “Warburn Estate” has lifted its initial Chardonnay price offer up to $400 per tonne. This glimmer of hope shows that wineries are aware of the high cost base and the returns required by producers to remain within the industry and compete,” Brian Simpson Chief Executive Officer of the Wine Grapes Marketing Board advised, “Based on last season intake the Board now estimates that one third of Chardonnay harvested in the region will achieve around the $400 per tonne mark.”

“The industry is being turned upside down by a market where low cost fruit is driving sales. If the spiral to sacrifice value to move volume continues the consumer may be the only beneficiary, winemakers trading conditions will tighten and importantly the grower base will suffer with many growers being forced to exit the industry,” Brian Simpson said.

Mr Peter Gerarde-Smith Rural Financial Counsellor with Murrumbidgee Valley Rural Counselling Service (based in Griffith) stated, “Past and presents client contact indicates that a large proportion of wine grape producers will be forced to reassess their position in the industry as the market collapse in prices continues. It will be a critical period over the next 12 months with many growers facing the prospect of having to exit the wine grape industry.”

“The Murrumbidgee Valley Rural Counselling Service Inc. (MVRCS) is available for all growers to discuss assistance and options available over this delicate period,” Mr Gerarde-Smith advises, “Growers can contact our offices on 6964 1557 to seek an appointment.”

“The Counselling service is a free service to rural industries supported by both the State and Federal Governments and industries bodies such as the Wine Grapes Marketing Board,” Brian advised, “It is important that growers avail themselves of all such options in these difficult times and not be afraid to seek support and assistance.”

In this region where there still remains slightly over 4,000 tonnes of wine grapes that do not have a buyer, there is hope that this fruit will be taken up by wineries thinking locally. Local growers invest and inject millions into the local economy in which the wineries operate it is therefore beneficial for their future and their employees to have a viable regional economy.

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