Excavators are “booked out for six weeks” near Griffith as grape growers rip out vineyards in the wake of punishing China wine tariffs and a shift in consumer tastes.
Already a subscriber?The red wine glut is expected to plague Australian vineyards for at least the next two years, even if punishing tariffs on wine exports to China are removed, predicts Rabobank, a Dutch bank specialising in lending to the agricultural sector.
Pressures have mounted in the lower-end commercial sector – for wines selling at below $10 a bottle – and margins have been squashed. Mr Brombal said it could take 12 to 18 months before Australian wine can begin making headway again in China.This is because $1.2 billion of Australian wines that had found their way onto the shelves of retailers in China annually, have been replaced by brands from Chile, Argentina, South Africa and Europe.
one of the big operators in the Riverina, diversified 14 years ago into the premium Barossa Valley region in South Australia, where it produces the label Saint Petri. That move has helped the winegrower withstand commercial pressures.The latest set of financial accounts lodged with the Australian Securities and Investments Commission show revenue in the 12 months to June 30, 2023, were $73 million, steady on the previous year. Net profit after tax inched ahead to $3.75 million from $3.
Rabobank analyst Pia Piggott said that before the start of the 2024 grape harvest, which began in earnest in late January in many regions, there was an oversupply of about 590 million litres of wine in Australian tanks. The move by supermarkets to sell more private label wines was partly to blame for the industry’s woes, but experts said the collapse in exports to China and shifting consumer trends played bigger roles.Jim Barry Wines was more optimistic about the proposed opening up of the Chinese market.Based in the Clare Valley in South Australia, Jim Barry Wines had just put its toe in the water in China in late 2019 when the tariffs hit.
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