Accolade proposes buy-out offer to assist Riverland grapegrowers

Accolade Wines CEO Robert Foye

by Meg Riley

Accolade Wines has proposed a potential lifeline for Riverland growers looking to get out of the industry, with an offer including $4,000 per hectare for red winegrape growers locked in contracts with the CCW co-operative group.

Accolade presented the offer in meetings with the CCW yesterday, with meetings continuing today. The buy-out offer will go to a vote within the CCW, and must receive a two-thirds majority from the 530 members in order to pass, although grower participation in the buy-out will be voluntary.

“As an industry, for us to continue as if no response is required simply isn’t sustainable,” explained Accolade CEO Robert Foye. “We have a shared responsibility to face into this challenge and respond.”

“We’re offering a voluntary and flexible solution that offers to buy out the contracts of growers who wish to exit the industry given the current challenges.”

Under the proposed offer, Accolade would cap the volume of grapes it purchases from the CCW at 150,000 tonnes – a reduction of roughly 20 percent. The price for these grapes will be set by the Weighted District Average.

Growers with existing contracts with the CCW who choose to participate in the buy-out would be granted the freedom to retain their vines and sell their grapes on to other wineries if they choose to do so. Alternatively, growers would be free to pull up their vines and move to other crops, or exit the agricultural industry altogether.

Historically, these vines could have achieved prices of roughly $8,000/ha, however Accolade has cited recent industry pressures such as the tariffs on Australian wine to China, declining global wine consumption and changing consumer preferences as some of the significant structural headwinds lessening demand for red winegrape varieties.

“We’re wanting to take a constructive approach to the biggest industry challenge in many years,” said Foye.

“This package provides all growers with greater certainty and clarity. It allows us all to manage a difficult transition more smoothly, it allows those who wish to exit to do so with dignity and those who want to continue to do so with greater confidence.”

“It also ensures that Accolade can operate sustainably and that there is an ongoing source of demand for grapes in the Riverland.”

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