Riverina grape growers on the brink of collapse

Growers are being squeezed out of the industry – a symptom of a correction in a market that has been in oversupply for close to a decade.

There are calls for the code of conduct to be more strict so farmers have more say in the process.

Riverina Wine Grapes Marketing Board chief Brian Simpson said the current market trend is a race to the bottom.

“Eighty per cent of the industry was unprofitable in 2014,” Mr Simpson said.

“It’s also looking quite flat in 2015. We need to empower our producers.”

Calabria Family Wines managing director Bill Calabria said the industry as a whole needs to promote itself more on the global market.

“The government could do a little bit more for producers to compete on a global scale.”

He said the industry failed to capitalise on the boom at the turn of the century, when Australia was the flavour of the world on the back of the Sydney Olympics.

Mr Calabria is hopeful the market is at a turning point, but acknowledges the growers are in a difficult situation.

“There are some encouraging signs out there.”

“We need (grape growers) and they need us, so we try to look after them.”

Mr Simpson says market conditions are very difficult at the moment, but it would survive.

The lower dollar gives growers more wriggle room on a global scale, but margins are being soaked up through the supply chain, Mr Simpson says.

Sales have declined domestically – people aren’t drinking as much wine as five or 10 years ago.

Mr Simpson thinks a blanket solution, such as Independent Senator Nick Xenophon’s proposed 25 cent levy for growers, will not be as effective, because of the varying needs of individual producers. Some farmers may not be in debt, while others are on the verge of collapse and would need more support.

He said better regulatory frameworks were needed to suit these variations.

Grape producers have halved from 670 producers 15 years ago, and the farmers who have survived are undervaluing wine to keep their heads above water.