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Growers say wineries must declare prices now
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Wine Grape Growers Australia (WGGA) has called on major wine companies to declare their grape prices for 2008 vintage as the irrigation water crisis affecting grape growers along the Murray deepens – in what the peak growers body has described as “an unprecedented threat to the economic fabric of the wine industry.”
In letters to the Chief Executives of the major wine companies WGGA Executive Director, Mark McKenzie, said the best case scenario for 50% of Australia’s vineyards was drastic yield reductions in vintage 2008, and the worse case scenario was barely enough water to keep vines alive. WGGA estimates that the likely best case scenario for the 2008 vintage will be a national crush of around 1.2million tonnes – a further fall on the very low 2007 vintage production of 1.34 million tonnes (which was 30% or 600,000 tonnes lower than the 2006 vintage).
Mr McKenzie has told the major wine companies that they must immediately inform growers of realistic grape prices or face the prospect that production will fall even further as many growers already under severe financial distress sell off all or part of their water allocations, rather than attempt to produce a crop in 2008. WGGA has warned the wine companies of the long-term negative impact on national wine production should this occur.
“If, after 4 years of unsustainably low prices, wine companies do not respond to this second consecutive short vintage with a very significant lift in grape prices, the resulting sell-off of water, decline in productive vineyard area, and exodus of growers from the industry, will leave the industry with critical shortages of grapes for some years – jeopardising Australia’s wine export markets.”
“WGGA is calling on wineries to immediately engage with growers on the real level of grape prices they are willing to pay and on their priority varieties for the next vintage, so that growers can make decisions on how they will allocate limited water to their vineyards. Given the serious decline in grape prices witnessed over the last 4 years, growers need something more definite than wineries intention to pay “market price”, because “market prices” in recent years have been unviable. Growers would reasonably expect that the 2008 market prices will eventually rise in line with the critical shortages of grapes the industry now faces – but they need wineries’ assurances on viable price levels now,” Mr McKenzie said.