Wine Industry

The Hon. N.J. CENTOFANTI (Leader of the Opposition) (14:56): I seek leave to make a brief explanation prior to addressing a question to the Minister for Primary Industries and Regional Development regarding the wine industry.

Leave granted.

The Hon. N.J. CENTOFANTI: Last sitting week, in response to a question in this chamber on what the government is doing to support winegrowers to maintain production and diversify their land, the minister commented:

It is interesting that she (the honourable member) says that vine pulls are inevitable. I think there is certainly some active and live debate around that. One of the reasons for that live debate is the lack of data, particularly in other states around demand and supply….That means there is a lot of debate around the supply.

The oversupply of wine grapes used for commercial wine is a global issue and not confined to Australia. The excess production and declining market that is impacting the Australian wine sector is a global issue, and there is ample evidence of supply and demand imbalance both here and overseas and plenty of examples of how that oversupply is being addressed elsewhere. Just this morning, peak body Australian Grape & Wine's chief executive, Lee McLean, said on ABC radio that there is 'a crippling oversupply of red wine'.

I can quote other sources of data for the minister: the annual production sales and inventory report by Wine Australia; the Wine Australia Dashboard, which shows supply and demand data for inland wine-producing regions currently indicates a stock to sales ratio of 2.1—in other words, companies are holding an average of 2.1 times annual sales. For context, the long-term stock to sales ratio is 1.6. The Australian Bureau of Agriculture and Resource Economics and Science report on wine production notes that:

The International Organisation of Wine and Vine estimates that between 1995 and 2022 annual global production averaged nearly 14 per cent higher than global consumption of wine.

Ciatti Global Market report for 2024 includes the quote:

The overall size of the 2024 crush is difficult to estimate as due to lack of demand a volume of red grapes has been left uncontracted and unmaintained.

Last but not certainly not least, the Wine Economics Centre at the University of Adelaide, a hugely respected source of information—Professor Kym Anderson from the centre gave a presentation on 23 April, entitled 'Crisis in Australia's wine industry: origins, hiccups and ways forward', which talks about a global surplus of reds. My questions to the minister are:

1. Was the minister unaware that there are numerous quality sources of wine sector data that all confirm the severity of the current oversupply situation?

2. Was the reason for the minister discounting the likelihood of vine removal and land diversification due to the lack of awareness of the severe and global nature of this trend?

3. Does the minister have a reason to downplay the high likelihood that there will be changes to the vineyard footprint in the Riverland?

4. Does the minister agree with the Liberal Party position that proactive planning and land diversification is required to preserve the agricultural production capacity of the Riverland region?

The Hon. C.M. SCRIVEN (Minister for Primary Industries and Regional Development, Minister for Forest Industries) (14:59): I thank the honourable member for her question. I think she is either accidentally or deliberately misinterpreting my comments. They were said in the context—

Members interjecting:

The Hon. C.M. SCRIVEN: Again, if they don't listen to the answer, it's probably not surprising that they often misinterpret things that have been said. The context of the comments, as I recall, was in regard to the difficulties of initiatives such as vine pulls when they may have unintended consequences; for example, if vine pulls on one side of the border are done but there is no similar program on the other side of the border, that doesn't improve the overall supply, particularly if the other region actually increases the number of vines and increases its plantings.

The level of detail that is required around the supply side is the question, and that is the information and the comments that have come from industry directly to me: that we need more information and that South Australia has very robust data, particularly through the vine health database, but that other states do not have that same level of data and the level of granularity in terms of the specifics.

To imply in her question that anyone who has been listening could not know that there is a global oversupply of red wine grapes is absolutely ridiculous. To suggest that anyone who has been listening here in Australia would contest that there is an oversupply of red wine is absolutely ridiculous. Again, she needs to really—instead of trying to score political points—listen to what the answers are, which she very rarely does.

The Hon. N.J. Centofanti interjecting:

The Hon. C.M. SCRIVEN: I can almost rest my case, given she is no longer listening but instead heckling as usual. In terms of the level of granularity, that is what industry has been asking for and that is what I was referring to.