Winegrape prices continue to fall

A significant proportion of Australia’s winegrape harvest has been purchased at below production costs, according to a pricing report released by Wine Australia. 

The Winegrape Purchases: Price Dispersion Report for 2011 was published this week and the average prices detailed account for an estimated 80 per cent of the total purchases in 2011.

According to the report, 28 companies were surveyed  having purchased 928,757 tonnes of winegrapes, with a total value of $384 million. Overall, the aggregate purchase price per tonne was $413.

This is a drop of $51 a tonne on last year’s results ($464), and a further drop from $527 in 2009 and $717 a tonne in 2008.

In three of Australia’s biggest winegrape producing regions – the Murray Valley-Swan Hill, Riverland and the Riverina – winegrape purchase prices averaged at $277, $275 and $296 per tonne, respectively.  

Earlier this year, regional grapegrower organisations estimated the average production costs in the Murray Valley, Riverina and Riverland regions for 2010 to be between $350 and $450 a tonne. Additional chemical costs due to higher disease pressures in these regions added to production costs this year.

The report goes into greater detail, with purchased tonnages distributed across the price spectrum, and price dispersion read-outs for varieties by region.

In the report’s introduction, Wine Australia says the information can to be used by the buyers and sellers of winegrapes to conduct a dialogue about the type of fruit sought and a fair and reasonable remuneration for it.

“Such dialogue is likely to go beyond price advocacy and into business planning to improve quality, efficiency and profitability for all parties,” the report states.

To access the report, visit; accept the terms and conditions and enter ‘Price Dispersion’ in the key word search.