A taskforce will investigate the crisis gripping the nation’s wine industry that has led to farmer protests and growers warning they are at breaking point.

Representatives from all levels of government as well as industry groups will form a working group to come up with some solutions to the problems plaguing the wine grape sector.

Australia’s agriculture ministers met on Friday and agreed to the taskforce, following a drastic oversupply of some types of wine and the ongoing lockout from the market in China.

The group will visit regions most impacted by the oversupply, including the Riverland in SA and the Riverina in NSW, then report back to state and federal agriculture ministers by the end of April.

Wine glut’s ‘heartbreaking stories’

Australian Grape and Wine chief executive Lee McLean, who will be part of the working group, said the announcement was good news and “shows that ministers understand the gravity of the situation and the urgency to the issues being faced by the sector”.

Earlier this year, Riverland wine grape growers took to the streets in protest to demand changes to make the industry more sustainable.

There have been calls for a moratorium on further vine plantings

Mr McLean said the Chinese government import tariffs have reduced Australian exports significantly.

Exports have plummeted from a peak value of $1.2 billion in 2020 to about $10 million in the current market.

The wine industry says the current downturn threatens the jobs of the 160,000 people.

Last year, Rabobank estimated an Australian wine glut of more than two billion litres; enough to fill 860 Olympic swimming pools.

“So it’s been an enormous shock to the system,” Mr McLean said.

“And that’s sort of manifesting in the form of very low prices and low demand, which is making it very, very difficult in a number of regions.”

At a recent South Australia Riverland meeting, Mr McLean said he heard some “heartbreaking stories” from wine producers, with many farmers considering ripping out their vines, or leaving the industry altogether due to massive financial losses.

Situation ‘dire’

One of those Riverland farmers is second generation wine grape grower Jagi Sandhu, who farms at Barmera. 

He said the situation was “quite dire” for his young family, as well as for his father who migrated to Australia in 1999, but was now worried about his finances into retirement.

“We are really struggling,” he said.

“We have made a decision that we are not going to pick our red wine grapes this season because the price is too low.”

Jagi Sandhu is a second generation wine grape grower at Barmera in South Australia’s Riverland(Supplied: Jagi Sandhu)

Mr Sandhu said the working group was a step in the right direction but was concerned ministers wouldn’t be visiting the regions, as requested by growers, and hoped the working group would focus on growers and not just winemakers.

“You need to hear both sides of the story,” he said. 

He also said the announcement brought no relief for farmers for this year’s harvest.

“It is three or four months too late for this vintage … but hopefully this will prepare us for next season,” he said.

“In the short term, the government could look at things like subsidising electricity for irrigation to help us get through this tough period.”

The Australian Grape and Wine association has requested a $86 million support package in the upcoming federal budget in May.

Mr McLean said better data was needed about the number of vineyards in Australia, as growers call for a moratorium on new plantings.

“There is an argument that we possibly have too many grapes in the ground, and there are some structural issues that need to be addressed,” he said.

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