Legislative Council: Tuesday, February 06, 2024


Grape Prices

The Hon. F. PANGALLO (15:03): I seek leave to make a brief explanation before asking the Minister for Primary Industries and Regional Development a question about grape prices.

Leave granted.

The Hon. F. PANGALLO: Last weekend, in Loveday, I met with about 100 angry grapegrowers. They painted a very grim picture about their futures and that of the entire Riverland region. The region, and the neighbouring Riverina and Sunraysia, is on the brink of collapse due to appalling low prices offered by the big wine companies for their grapes. They are being offered about $150 a tonne for their red grapes—prices they were getting in the 1970s—when only a few years ago they were getting between $600 and $700 a tonne. To meet their costs, they need at least $300 a tonne, so the prices they are being offered are simply not sustainable. Some are facing bankruptcy.

Many growers have already decided not to harvest this year, while others will need to decide what to do with their crops in coming weeks. Many feel the wine companies have a gun to their head and are trying to extort them: 'Take it or leave it.' Accolade, one of the largest buyers, wants to rip up the existing preferred sales agreement. The state cannot afford to lose this crucial grapegrowing region, which is a major contributor to the state's $2.5 billion annual wine production.

The Riverland is the main wine contributor, with 50 per cent of the nation's vineyard plantings and 46 per cent of the total tonnes of the national crush, and is a major contributor to the 60 per cent of the wine produced in South Australia exported to over 100 countries around the world. Today, the minister is accusing the Liberals of waging war against our farmers. It seems the Malinauskas government is deserting them through inaction and lack of interest to hear their plight. My questions to the minister are:

1. What is the government going to do to support these growers?

2. What provisions do the primary industries minister and the government have in place to ensure Accolade Wines completes its payment obligations for grapes taken in 2024 up to the time of new owners taking over and paid to the CCW Co-operative in the same payment time schedule as agreed?

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (15:06): I thank the honourable member for his question. Certainly, the crisis that is in the Riverland in regard to the wine industry is absolutely significant. That is why as a government and as minister we have been meeting in the Riverland and elsewhere with growers, with winemakers and with industry associations frequently over the last 18 months to two years—just under two years.

A number of things have emerged from that. Clearly, there are some things that are not the role of government. Intervening to set prices is not something that governments generally do in Western democracies. The overall issue of wine oversupply, particularly red wine oversupply, internationally is significant. It is not something that individually in South Australia we can make a difference to.

What we can do, and what our government has been doing, is attempt to do our part towards one of the major contributors to the crisis that our wine grapegrowers and the wine industry more broadly are facing, which is to re-engage with China. We know that, sadly, the former federal Coalition government engaged in behaviour that certainly increased the difficulties and tensions with our major trading partner, and the impacts of that behaviour over many years have been significant.

However, both the Prime Minister and our Premier in South Australia, Peter Malinauskas, as well as our trade minister in the other place and the trade minister in the Senate, have been working very hard to re-engage with China and to repair that relationship. We are hopeful that there might be some good news forthcoming from that.

The government has been running some re-engagement strategy workshops, and as part of that strategy close to 200 businesses from the wine sector in South Australia were able to gain insights into the China market at workshops held in the Barossa, the Adelaide Hills and Coonawarra, and indeed one was held in the Riverland, which was where the protest was held. The workshops were facilitated by the Department for Trade and Investment in partnership with the South Australian Wine Industry Association and PIRSA.

It is important to note, however, that it is critical that we do continue to try to re-engage with China and hope that there will be a reopening of that market, but it won't be the panacea to all the issues within the wine industry. It has been said both by myself and also by those on the opposite side of politics that this is an issue that has been brewing for some time—sorry, no pun intended. It has been developing for some time.

Changes in tastes worldwide mean that fewer people are drinking wine and fewer people are drinking, particularly, varieties such as shiraz and cabernet sauvignon. Those things are global issues. What we have done in South Australia, in addition to what I have already mentioned, is work closely with the Riverland wine industry.

We had a round table there back in I think it was November 2022 and one of the things that emerged from that round table was that the industry really wanted a strategic approach to this. The outcome of that was the investment by the state government in the development of the Riverland Wine Industry Blueprint. One of the messages that came through very clearly was that they didn't want kneejerk reactions such as vine pools. That had been experienced in years gone past and it isn't a strategic approach. It isn't something that supports the industry in the region as a whole.

Developing the blueprint in consultation and close work with industry was to deliver the 10-year strategic plan, which I was able to be at the launch of on 21 November last year. I also was able to announce an additional $200,000 in funding to support the implementation of the plan for the next two years and that will be used to engage a project implementation officer to work in region to assist with the delivery of those priorities. Last week, I think it was, the first implementation workshop was hosted by the Riverland wine association and the second implementation workshop will be hosted I think later this week.

We have also looked at practical on-the-ground assistance with the Ethephon rebate trial, which was a program that enabled grapegrowers to potentially save up to $2,000 per hectare in terms of input costs. That is part of a trial that involved assessing the ability by using Ethephon to rest the vineyards but in such a way that that didn't result in a long-term resting and therefore the inability to make decisions around replanting in the following year, but actually enabled potential replanting in the next season. That is a rebate which has been made available for up to a total of 1,000 hectares per grower.

We will continue to work with the industry to do the things that state governments do have a role in and we will continue to be open to potential solutions that others may be able to offer as we continue that engagement with industry.