GRIFFITH, Australia, March 9 (Reuters) – Millions of vines are being destroyed in Australia and tens of millions more must be pulled up to rein in overproduction that has crushed grape prices and threatens the livelihoods of growers and wine makers.
Falling consumption of wine worldwide has hit Australia particularly hard as demand shrinks fastest for the cheaper reds, and in China, the market it has relied on for growth until recent years.
The world’s fifth largest exporter of wine had more than two billion litres, or about two years’ worth of production, in storage in mid-2023, the most recent figures show, and some is spoiling as owners rush to dispose of it at any price.
There’s only so long we can go on growing a crop and losing money on it, said fourth-generation grower James Cremasco.
About two-thirds of Australia’s wine grapes are grown in irrigated inland areas such as Griffith, where vines are being uprooted rapidly.
Major wine makers are refocusing on more expensive bottles that are selling better, leaving areas like Griffith struggling, with unpicked grapes withering on vines. Many growers are switching to other crops like citrus and nut trees for better profits.
There is a need to pull out up to a quarter of the vines in regions like Griffith to balance the market and lift prices, experts say.
While some areas like Tasmania and the Yarra Valley are faring better with premium wines, the oversupply crisis persists.
It’s chewing up wealth, said KPMG wine analyst Tim Mableson. Wineries are practically giving away wine to make space for the new vintage.
The future remains uncertain as growers and winemakers grapple with the aftermath of the wine glut, hoping for a turnaround in the market soon.
