Media releases

WGGA launches new online help for contracts

Australia’s independent winegrape growers are being urged against taking a “business as usual approach” in negotiating contracts with grape purchasers for the 2012 harvest.

Wine Grape Growers Australia Executive Director Lawrie Stanford gave the warning while launching new online information tools to help growers negotiate their grape sales. The online initiative was launched today at WGGA’s annual general meeting in Adelaide.

Mr Stanford said while most producers were acting fairly and ethically in the current challenging operating environment, some were exploiting the financial plight of independent growers to negotiate unfavourable contracts in a “David versus Goliath” scenario. In a chase to the bottom for prices, others follow to remain price competitive.

As a way of assisting growers desperate to sell their fruit and to hold their own in a market with depressed prices, WGGA has launched three new online information tools for growers:

  • A checklist of things to consider for growers entering into grape supply contracts.
  • An easy-to-use contract template that is fair to both growers and producers.
  • An “at a glance” outline of the dispute resolution process within the Australian Wine Industry Code of Conduct.

These information tools can be readily downloaded from the WGGA website at www.wgga.com.au.

Mr Stanford said there is emerging evidence of a range of unfair contract practices in the lead-up to the 2012 harvest.

These include re-interpreting standard clauses in ways that are convenient to the purchaser, setting prices or price determination mechanisms that do not accurately reflect grape quality and a trend towards ‘disposable’ contracts that have unbalanced ‘get out’ clauses.

Mr Stanford said to avoid being taken advantage of, growers must be willing to “walk away” from grape purchasers who are offering financially unsuitable or damaging terms.

“It’s critical that growers are well-versed in what is needed in a contract such as clarity on the quality and price for grape tonnages or a price setting mechanism, who has liability for damaged fruit during the harvesting and sales process, and payment terms,” he said.

Mr Stanford said the online information tools provided by WGGA would greatly assist independent growers and, by being freely available on WGGA’s website, were instantly accessible to growers anywhere in Australia.

A revised industry Code of Conduct to be available soon

Mr Stanford said it was encouraging that WGGA and the Winemakers Federation of Australia (WFA) had recently agreed to a revised Code of Conduct – a move expected to be ratified at WFA’s annual meeting on November 23. Nevertheless, it was disappointing that a relatively small number of winemakers had become signatories to date.

“Growers should ask grape purchasers if they are signatories to the Australian Wine Industry Code of Conduct and ideally, should only deal with those who are. By way of insurance, they should also understand the dispute resolution process in the Code.”

Mr Stanford also noted that the Code sets out only the basic requirements of good commercial practice.

“If a winemaker wishes to be unreasonable in their contract writing, and a grower is willing to sign up to potentially unfavourable conditions then these conditions are agreed and recourse to the dispute process is difficult,” Mr Stanford warned.

“Of course, there is also the problem that a large number of winemakers aren’t even signatories and are therefore not accountable to even the basics of good and fair commercial practice.”

WGGA Chair, Mr Vic Patrick, called on winemakers to take a leadership role in setting winegrape prices that offered the industry as a whole the best chance to restore the supply-demand balance by market signals that encourage sustainable fruit production.

“In an industry that prides itself on open and accountable market determination of its fortunes, the lack of leadership by the winemaking community is regrettable,” Mr Patrick said.

In a further blow to growers, winemakers are currently using contracts to force costly compliance measures on growers such as expensive environmental accreditation and membership of WFA’s EntWine program. This is done by making contracts contingent on accreditation and membership.

“In a discriminating way, winemakers should be encouraging the production of sustainable fruit, and discouraging that which isn’t. Lower prices, applied in a blanket fashion, are not in the longer term interests of the industry,” Mr Patrick said.

“This is a last-one-standing strategy that often denies growers the ability to cover costs and supports lost-cost, low asset wine trade.

“In turn, it pays no regard to the viability of valued growers who can support a bright future for the industry and it contributes to the maintenance of oversupply while undermining of the reputation of Australian wine.

“The Australian wine sector has for a long time prided itself on a strong collegiate identity and celebrated the competitive advantage this gives the national industry.

“It seems as though the vision, and the advantage, have been lost,” Mr Patrick said.

For further information and media interviews, please contact WGGA Executive Director Lawrie Stanford on 0417 859 282.

 

The apparent 2011 crush indicates enduring oversupply

After a meeting of the national representatives of Wine Grape Growers Australia (WGGA) last week, the WGGA Executive Committee today predicted that the national crush in 2011 is likely to be between 1.3 and 1.4 million tonnes. That would represent a crush of between 19% and 12% down on the previous year’s crush and represents the third annual decline in a row following the 1.83 million tonne crush four years ago.

Drivers of an anticipated lower 2011 crush were (i) lost or rejected tonnages due to disease, (ii) as yet unquantified removed or abandoned vines, and (iii) un-economic or diseased fruit left on the vine or dropped at harvest.

WGGA Executive Director, Mr Lawrie Stanford, issued a warning that despite another apparently lower crush in 2011, the evidence was that the industry was still capable of producing more wine than could be profitably utilised by all members in the value chain.

While the crush is believed to be 1.3 to 1.4 million tonnes, it is understood that a lesser amount (in the vicinity of 1.1 to 1.2 million tonnes) went into wine production that had real prospects of returning a long-term profit in the marketplace.

In what was a relatively cool season that hindered full sugar development, the balance of the fruit above the 1.1 to 1.2 million tonnes going directly into wine production represented otherwise unwanted fruit, purchased well below the cost of production, for the purposes of making concentrate to boost the sugar content of grapes taken in for winemaking.

Alternatively, in a dynamic not fully understood or quantified at this time, the ‘balance’ may have been used for low grade wine in order to compete with low-cost world producers and bulk wine traders. Such practices concerns WGGA because it is only possible by purchasing fruit at well below its cost of production. In the process, this trade is impoverishing growers who in recent years have assumed by far the larger part of the agricultural risk. Moreover, it damages the reputation of Brand Australia in the eyes of wine customers and consumers worldwide and undermines Australia’s aspirations to be, and to be seen as, a premium wine-producing nation. It further devalued the efforts of the nation’s wine marketers to build Australian wine’s reputation at a time when demand was suffering.

Harvest update Feb-March 2011 – trends and issues

Industry Release 22 March 2011

WGGA Harvest Update – February/March 2011 – Trends and Issues

With the harvesting of white winegrapes well underway in most districts across Australia, but with the red harvest yet to start, an upward trend in tonnages has been reported in a new harvest update conducted in late February/early March by Wine Grape Growers Australia (WGGA) and Wine Grapes Council of South Australia (WGCSA).

After a brief reprieve from earlier wet, cool conditions, a period of generally dry and warmer conditions in late December/early January, suggests that tonnages from the 2011 harvest have edged up from the 1.4 million tonnes reported from a similar survey in late December. Quality expectations are high for the white fruit that has survived the ravages of disease over the course of the season. The reds that are yet to be harvested will face continuing challenges and uncertainty.

Commenting on this phenomenon, Lawrie Stanford, Executive Director of WGGA, said “In an interesting trade-off, the season has produced strong flavours and good acidity for crisp, aromatic whites. This will maintain the quality and interest despite some dilution of these characters by a good dose of water” Reflecting on factors that can, and can’t be controlled, he commented that “While we have ways to manage disease, it’s hard to turn off the water when it comes from the sky”.

In sum, the harvest thus far has been characterised by cooler than normal conditions, plus prolonged wet and then humid conditions – all of which led to early disease pressures. This was associated with practical as well as financial difficulties in management and considerable pessimism about the crop’s welfare.

Despite the challenges, successful management appears to have predominated although there still appears to be some variability influenced in part by the existence of abandoned and financially stressed vineyards. The reprieve from the wet conditions in late December/early January allowed some finishing-off for the white crop that is exhibiting good expression of character because of strong vine growth and the relative coolness of the season.

Variability is once again the key and region-by-region reports will be vital to gaining a complete picture.

It is apparent that the prevailing moisture levels this season have led to bigger fruit and higher tonnages per hectare that have more than offset losses from disease. Adding to this affect has been the relaxation of yield limits by some winemakers because of earlier pessimism about available production due to observed disease losses.

With the cooler nature of the season so far, the vintage is 3 to 4 weeks behind last year. The red harvest is generally about 2 to 3 weeks away at the time of writing. “Continued sporadic rain events in different parts of Australia nevertheless serve to remind us that the harvest is at best, half way through and there is much that can happen yet” said Mr Stanford. “If there is further rain in some regions the red harvest could end up being very different from current expectations.”

As the red harvest is about to commence, an additional challenge is expected to emerge – that of the red crop’s ripening. Some concern about this has been reported due to the lateness of the season and the damage caused by disease on leaf functionality.

While there were indications that tonnages were edging up from earlier estimates, Mr Vic Patrick, WGGA Chair, stated that a credible estimate was not possible. “It is regrettable that the industry is not collecting harvest intelligence in a timely fashion – industry stakeholders want and need to know” said Mr Patrick. “To the extent that these estimates rest in some part on knowledge about the actively maintained vines in the industry, it is puzzling why more industry resources are not assigned to understanding this component of the industry’s production equation.”

In recent years, on the back of massively increased charges sought by the Australian Bureau of Statistics to collect viticulture data through the Vineyard Survey, the regular collection of this data has been disrupted. Nevertheless, WGGA notes that GWRDC will invest more than $670,000 of levy funds on a full vineyards census in 2012 but a gap year exists for 2011. The Australian Bureau of Statistics’ Agriculture Census will cover events in 2011 but on standard timelines, the data will not be available until April 2012.

Even in the best of circumstances, the currently vital vine removals data comes with a lag. This lag leaves the industry blind to up-to-date adjustment that is occurring. The latest national intelligence available to the industry on vine removals is for 2009 – which primarily influenced outcomes in the 2010 harvest.

Despite some informal attempts by WGGA and WFA to measure removals leading into the 2011 harvest, nothing is clear. “At a time when the industry is going through supply adjustment that is vital to the industry’s future, the industry is not reliably informed as to what is happening”, said Mr Patrick.

At last count, for the 2010 vintage, 13 000 hectares or about 8% of the industry’s total area, was left unharvested or the fruit was dropped at harvest. Mr Patrick commented that “We also don’t know what has transpired with these vines leading into the 2011 harvest. Such gaps in industry knowledge can be costly to both grape growers and winemakers in terms of prices and orderly logistical handling of the harvest. The industry needs to develop systems to capture this data in a timely way.”

WGGA and WFA, together with the Grape and Wine Research and Development Corporation (GWRDC) and Wine Australia Corporation (WAC), are committed to the creation of a national vineyard database, along the lines of the SA database administered by the Phylloxera Grape Industry Board of South Australian. However, due to the requirement of legislation, this is a medium-term solution.

While acknowledging limitations on industry planning funds in the current operating conditions, WGGA views the industry’s service bodies, the GWRDC and WAC as bearing the greatest responsibility for the funding and analysis of such critical intelligence until the national vineyard database is in place.

For further information please contact WGGA Executive Director Lawrie Stanford on 0417 859 282 or Chair Vic Patrick on 0408 849 533.

 

FURTHER NOTES ON HARVEST TRENDS AND INFLUENCES

The white harvest is all but complete in the more northerly Australian winegrowing latitudes such as Queensland and the Hunter while it is largely complete in the middle latitudes in which the bulk of the harvest is taken and finally, the white harvest is yet to commence in the southerly latitudes such as the South Australian Limestone Coast and Tasmania.

In the eastern parts of Australia have been under the influence of La Nina which has defined the season. The dominant seasonal influences have been relative coolness accompanied with a wet winter and spring. These conditions even dragged into December. As the months became warmer (although still relatively cooler than the average) the wetness was progressively associated with humidity.

Late December/early January then saw a period of general reprieve with warmth and dryness allowing the crop to develop normally. With ample moisture and healthy vines the white crop finished well.

Sporadic rain episodes nevertheless resumed and continued into February albeit on a less protracted basis than earlier in the season. In this period, the hope was that the moisture would evaporate quickly because withholding periods in spray schedules meant spraying for mildew was not possible in many instances.

Inaccessible, saturated vineyards and in the extreme, even flooding, were the starkest expressions of this season’s wet conditions. Vineyard inaccessibility added to the challenges of disease management. While flooding was relatively rare, it was reported in the tropical-storm devastated areas of Queensland, isolated blocks in Leeton of the Riverina while extensive inundation has been reported in the Murray Darling-Swan Hill districts which appears to be the worst hit area among the warm inland districts that produce the largest part of the national winegrape crop.

In complete contrast, Western Australia, distant from the La Nina influences, experienced a dry winter, dry spring, some refreshing rain in January and, without any heat spikes as the summer progressed, consistent heat. Quality, balanced fruit development is reported to be in abundance.

As reported by WGGA earlier in the season, the costly management of widespread disease pressure has meant disease management has been variable depending on access in vineyards, access to sprays, the sales prospects of the crop and the financial reserves of vineyard operators.

It appears that effective management has nevertheless been possible for the majority of the crop.

Ample moisture has meant strong vine and canopy growth and the relative coolness is widely reported to have allowed good flavour development, lower sugar and higher natural acidity. For whites, this means the season will be good for the aromatic flavours that have met with consumer approval over recent years.

On the other hand, ample moisture has enlarged the berries and placed upward pressure on tonnages. As a result, tonnages are likely to be higher than they were thought to be earlier in the season when disease pressure was at a peak.

A further influence on the upward trend in tonnages has been added by the prolonged wet and uncertainty about continued rain which lead to some fruit to be taken off early, without full sugar development. This occurrence lead to the poorer, disease-affected tonnages that would have otherwise been rejected, being taken by wineries for the purpose of producing concentrate that can be added back to achieve required sugar.

Without the lashings of water in the west, character development of the whites that are done so well in that state, have been intensified. A great, if not necessarily an ample year, results in the west.

Thoughts now turn to the red harvest. Reports of the prospects are, as for the whites, variable. The red crop also faces the uncertainty of rain but in addition, faces challenges of ripening. Risks to full ripening are posed by the lateness of the season which could mean vine shutdown before ripening is completed. There are already some reports of reddening and yellowing leaves. Moreover, deterioration of leaf functionality through the ravages of this season’s downy attacks is affecting ripening ability.

Enlarged fruit due to this year’s moisture levels pose a risk to colour intensity.

If rain continues further into the vintage, there will be a contest between botrytis rot and ripening – continued wet favouring the former and drier, warmer conditions favouring the latter.

From the outset, the tonnages per hectare of the dominant red varieties, Shiraz and Cabernet, were thought to be lighter than last year, reflecting a rest year after last year’s big crops. The current risk to ripening adds to the production risks for reds.

In contrast to most other parts of Australia, the red harvest in Hunter Valley is complete due to its more northerly location and earlier maturing. Perhaps consistent with the increasing risk, the longer the fruit hangs out there in a season such as this one, the Hunter Shiraz has been reported as ‘awesome’.

Download PDF file of this media release

 

 

 

Warm inland winegrape growers paying the price

Industry Release              22 March 2011

Wine Grape Growers Australia (WGGA) today expressed concern about the rate of adjustment in warm inland winegrape production capacity. This message is released in conjunction with the latest WGGA Harvest Monitor, which outlined a disproportionate impact of this season’s early downy and mildew attacks in the warm inland regions (the SA Riverland, the Murray Darling-Swan Hill districts of Victorian and NSW and the NSW Riverina) and their costly mitigation.

Mr Lawrie Stanford, Executive Director of Wine Grapes Growers Australia (WGGA), said “The cost of disease mitigation this year, on top of the costs of additional water over the last few years, has the potential to financially break many warm inland producers along the major Murray Darling Basin river systems. This will cause further disruptive economic impacts in these communities and accelerate adjustment out of warm inland production.  However, while supply adjustment in the wine sector is necessary, it is not the warm inland product that is principally in oversupply. Oversupply is predominately located in coastal-temperate winegrowing areas (the rest of Australia’) yet warm inland winegrowing areas are paying the greater penalty.”

It has been long acknowledged that production from outside the warm inland districts has been the predominant source of Australia’s excess production capacity. “At the end of the day” said Mr Stanford, “the 40% of Australia’s winegrape production accounted for by coastal-temperate districts, is trying to squeeze into about a 15% share of Australia’s wine sales.”

The reason warm inland production takes the hit derives from the fact that coastal-temperate fruit, due to its quality, is more desirable than warm inland fruit at the lower prices created by oversupply, and it is purchased for inclusion in warm inland wine brands in preference to the traditionally sourced warm inland fruit.  This has the consequence of driving warm inland prices even lower and pushing warm inland growers out of the market.

Price and production outcomes in 2010 are cited as evidence for this distortion.

In 2010, the Wine Australia Winegrape Purchases Price Dispersion Report showed that the average decline in warm inland winegrape prices was 19% while that for coastal temperate fruit was 5%.

On the production front, the 2010 Vineyard Survey data shows that warm inland regions accounted for a 72% share of the estimated net tonnages removed in 2009-10. This share is 12 percentage points ahead of warm inland’s traditional share of total production meaning it is over-represented in the removals occurring within the industry.

At the same time, demonstrating the oversupply of coastal-temperate fruit, the coastal-temperate districts held the higher share (at 53%)of the tonnages estimated to be left or dropped at harvest – meaning it is over-represented in the industry’s oversupply (production without demand) by 13 percentage points over its 40% contribution to total production.

“It is inconceivable that all of the higher-cost coastal-temperate production is sustainable at the current prices for which it is being sold into warm inland wine brands.  At the same time, warm inland prices are driven down to unsustainable levels. This can’t be good for the industry” said Mr Stanford.

The wider ramifications for the industry as a whole are that the industry will get smaller,is necessary in the current context of oversupply, but there will not be a sustainability dividend because unsustainable coastal temperate production will replace otherwise viable warm inland production.

The impact on large number of people and businesses in warm inland districts is demonstrable. Data collected by the Phylloxera and Grape Industry Board of South Australia (PGIBSA) illustrates the case.

PGIBSA data in 2010 shows that warm inland growers could account for a third of all winegrowing businesses.  Moreover, for SA in particular(and possibly demonstrating the case across Australia), the Riverland accounts for one and a half as many winegrape growing businesses as the next largest major wine growing district.

Another way of looking at the PGIBSA data is to net out businesses that are not full-time grape growing operations(taken to be 24 hectares or less) since they will have other income for support in a time of winegrape downturn. On this basis, there is still the largest number of full-time businesses in the Riverland despite a higher proportion of ‘part-time’ winegrape growers.

WGGA believes that factors like the current season’s disease impact are just bad luck for warm inland production, and to be taken on the chin.  However, it doesn’t seem to be in the best interests of the industry for the sizeable warm inland sector of the industry to be dealing with a disproportionate amount of the adjustment pain from oversupply when it is largely not they who have created the problem.”

It is notable that 2011 appears to be very similar in terms of largely unsustainable price outcomes as 2010: the problem has become critical for warm-inland growers.

The case is also made by WGGA that industry information and analysis is currently not up to the task of providing timely, accurate information to best understand the critical changes underway in the industry’s viticultural foundations.

WGGA is encouraging the industry’s service bodies to improve the level of information and analysis available to the industry.  It is also committed to assisting all winegrape growers understand their businesses better, to assess what parts of their businesses are profitable and to restructure as appropriate.

WGGA identifies the following courses of action required to bring about an equitable and effective adjustment process that yields the most benefit to the Australian wine sector.

  • Better and timelier information on adjustment occurring to the sector’s viticultural foundations.
  • Pro-activity by the industry’s organisations to facilitate adjustment that is in the best interests of all industry participants.
  • For winemakers to remove their own vineyards identified as being in excess of requirement, rather than selling them back into the production pool.
  • For winemakers to work with their growers to identify profitable production, to offer sustainable prices for that fruit only and to encourage growers to remove that which is not.

For further information please contact WGGA Executive Director Lawrie Stanford on 0417 859 282 or Chair Vic Patrick on 0408 849 533.

Download PDF file of this press release

“Partnerships in profit” are needed to overcome low prices

Media  Release  
25th January 2011

The Executive Director of Wine Grape Growers’ Australia, Mr Lawrie Stanford, said that Australian winegrape growers were carrying an unacceptably high level of the financial and production risk in winegrowing, particularly in this 2011 vintage.  “We believe through general hearsay that prices in 2011 will be similar to those in 2010, despite a start having been made in reducing production capacity in the industry and despite significant crop losses this season through disease pressure” said Mr Stanford.

Supporting calls for better returns to growers issued recently by the Murray Valley Winegrowers in Mildura and the Wine Grapes Marketing Board in Griffith, Mr Stanford explained that the financial risk of production was born by growers more so than winemakers due to several factors faced by growers:

  • Indicative grape prices released far too late in the season, after the bulk of production costs had been incurred and long after growers needed to make sensible economic decisions in their vineyards.
  • The high cost of disease management this year, in what has been an extraordinarily high season for disease-pressure.
  • The strong possibility of further disease outbreaks from continued wet conditions.
  • Fears of fruit being downgraded after receival at the winery.

Mr Vic Patrick, the Chair of Wine Grape Growers Australia said “Growers need sustainable prices and most prices in the current operating environment sit at less than the cost of production. Growers are encouraged to work closely with their off-takers to negotiate sustainable prices. The alternatives are one of two difficult choices – to operate at a loss or to review and adjust their business operations.”

Wine Grape Growers’ Australia went on to say that it was important to understand the role of market conditions in determining low prices. These conditions include (a) the surplus of wine grape production, (b) poor economic conditions in our key markets that affected consumer ability to pay and (c) a strong Australian dollar that has eroded margins.

“At the end of the day” explained Mr Stanford “the low prices on offer point, yet again, to the critical importance of effectively dealing with the one factor within the control of growers – the systemic oversupply that is at the root of the problem. Oversupply must be dealt with so Australian winemakers’ marketing programs can build momentum and lift the returns to the whole wine industry value chain, including winegrape growers.”

At the moment, because of the oversupply and low prices, rather than focusing on the quality of Australian wine, the major tangible signal coming from the Australian wine sector is “that Australian wine is cheap.”

Mr Stanford said, “The problem is that the dominant mentality in the Australian wine industry at the moment is a supply chain mentality – too many operators are hooked on low prices.” There are several important dimensions to this situation. Being dependent upon low prices is not sustainable and can’t last, it is sending the industry broke, it leads to a rundown of infrastructure and it undermines consumer perception of Australia’s quality wine product.

Wine Grape Growers’ Australia strongly urged the Australian wine sector to break out of the unprofitable spiral of events created by a reliance on low-prices to retain or grow its market share.

“Winemakers pay low prices for winegrapes for a number of reasons – in response to the competitive pressures they experience in the market place, because of expectations created by retailers through discounting, and because, in the current oversupply situation, they can. Consumers ultimately benefit but in the process, our industry is damaged and viable production and jobs will be lost. Consumers need to realise that unsustainable prices can’t last – the industry is going broke and the local product consumers cherish will dry up. Unfortunately, growers contribute to the spiral by continuing to grow unprofitable fruit and by accepting low prices for that fruit – through desperation and a misplaced belief that better days could be just around the corner.”

While the somewhat better prices growers should be able to negotiate this year are due to seasonal effects, the fundamental conditions that are keeping prices low are more enduring and go instead to the core underlying problem – excess production capacity in the industry.

To break out of the low-price spiral created by excess production capacity, growers are encouraged to determine what parts of their vineyards are profitable and to structure their businesses around those areas and varieties. They must also demand wineries pay sustainable ‘cost-plus-margin’ prices or walk away from the offer and strongly consider removing those areas of vineyard.              

“Growers are invited to talk to us about how to go about analysing their vineyard’s profitability” said Mr Stanford, “we have developed excellent programs in recent years that give growers the opportunity to work with others on analysing which areas of their vineyard are profitable and the results of restructuring accordingly.”

Finally, Wine Grape Growers Australia appeals to Australia’s winemakers:

  • not to offer prices below production costs just because they currently can,
  • not to take fruit if there’s not a sustainable market for the wine or profit for the grower of the fruit,
  • to remove those areas of their own vineyards they have identified to be in excess of requirement, rather than selling them back into the production pool, and finally
  • to work with their growers to identify the grower’s profitable winegrapes, offer sustainable prices for the fruit and help and encourage growers to remove that which is not sustainable.

“Developing such a ‘partnership in profitably’ between winemaker and grower is the pathway to a sustainable industry and offers the best chance the Australian wine sector has to break out of its debilitating reliance on low prices.”, Mr Stanford said.

For  further information and  media  interviews, please  contact WGGA  Executive Director Lawrie Stanford on 0417 859 282 or Chair Vic Patrick on 0408 849 533.

Federal Government urged “not to forget people” in Basin plan

Media Release     
13th October 2010

The national organisation representing Australia’s winegrape growers is urging the Federal Government  to “pay close attention” to the needs of people when assessing proposed water cutbacks outlined in the recently-released Guide to the Murray Darling Basin Plan.

Executive director of Wine Grape Growers Australia, Mr Lawrie Stanford, said the nation’s grape growers were deeply concerned about the proposal to cut water diversions by between 22% and 29% a year across the Murray Darling Basin.

“While WGGA recognises the importance of restoring water flows to the environment in the Basin, we are keen to see that people in the Basin irrigation communities are treated with the same amount of respect and dignity,” Mr Stanford said.

“Reducing  the  water  available  by between  3,000  and 4,000  gigalitres  a year  would  have  a potentially devastating effect on hundreds of small and independent winegrape growers in the Riverland, Murray Darling-Swan Hill and Riverina along with the businesses and communities that they currently support,” Mr Stanford said.

“WGGA – on behalf of a critical agricultural sector that generates significant export revenue for the nation – is urging the Federal Government and the Murray Darling Basin Authority to pay close attention to the balance between the needs of people and the needs of the environment.

“While we all recognise the importance of the environment, we want the Federal Government not to forget about people either.”

Mr Stanford said in presenting a strong case to the Federal Government, the WGGA will be supporting  regional  grower  associations  that  are  working  closely  with  affected  regional communities.

“While it’s too early yet to determine the precise impacts of such savage cuts to water available for irrigation – as growers have plantings of differing sizes under varying irrigation regimes in different locations – there is no question that cuts of the magnitude of 22% to 29% would cause widespread business failure and severe social disruption,” he said.

“The Murray Darling Basin Authority acknowledges the socio-economic dislocation that would be caused if the cutbacks go ahead.”

Mr Stanford said, however, he welcomed an assurance by the Authority that its Guide to the Proposed Basin Plan was not a “done deal”.

“It is a positive that the Authority has embarked on an extensive two-month consultation period among affected communities in the Murray Darling Basin,” Mr Stanford said.

 He said WGGA also welcomes the Government’s assurance that water buyback will only occur from willing sellers.

 “The buyback will enable some financially-distressed  growers  to exit the industry  with some dignity as the Australian wine sector is still suffering the effects of a global winegrape oversupply, punishingly high exchange rates and a highly competitive and crowded world wine market.”

Mr Stanford said the immense changes proposed in the Basin Plan come at a bad time for the winegrape growing sector, in particular, as it jeopardises the future of otherwise long term viable businesses that are currently stressed in a difficult operating environment.

“Our message to the government is very simple: please consider the livelihoods of winegrape growers and the impact on community life when making any future decisions on water cutbacks in the Murray Darling Basin,” he said.

“Through the Federal Government’s discretionary powers to adopt or modify the Basin Plan, WGGA appeals to it to exercise these powers with great care and to ensure that just and fair transition arrangements, including financial assistance beyond the water buyback, are put in place to address severe social disruption.

“And, finally, it’s important to remember that vibrant and prosperous regional communities are a critical factor in protecting the environment,” Mr Stanford said, “just as a sustainable environment is required to support prosperous regional communities.”

For  further information and media interviews, please contact WGGA  Executive Director Lawrie Stanford on 0417  859 282 or Chair Vic Patrick on 0408  849 533.

Download PDF version of this press release

Industry Info