Motions

Wine Industry

Adjourned debate on motion of Hon. N.J. Centofanti:

That this council—

1. Recognises the importance of South Australia's wine industry to the state's domestic and international export economy;

2. Acknowledges the resilience of our wine grapegrowers through a time of uncertainty and the need to explore structural adjustments on-farm going forward;

3. Urges the Malinauskas Labor government to enable more diverse global partnerships for South Australian wine exporters by facilitating a higher trade presence in both traditional and emerging trading countries; and

4. Calls on the wine industry bodies to unite as one to rebuild our global reputation.

(Continued from 10 April 2024.)

The Hon. D.G.E. HOOD (18:06): I thank my colleagues for allowing me to give this speech today. I will be brief; I am aware I am the last speaker of the evening. I rise to speak in support of the Hon. Nicola Centofanti's motion requesting that this council recognise the importance of South Australia's wine industry to the state's domestic and international export economy and acknowledge the resilience of our wine industry and grapegrowers through this difficult time of uncertainty.

South Australian wines are, of course, among the best in the world and many of us can attest to that. They are renowned for their quality, character and craftsmanship. Our state alone produces 50 per cent of our entire nation's wine and approximately 80 per cent of its premium wine exports, which I do not think is advertised sufficiently. Our wine industry generated almost $2 billion in revenue for our state in 2022-23 and directly employs some 9,000 South Australians in grapegrowing and winemaking. We export some 377 million litres of wine worth $1.85 billion per annum, which equates to over 60 per cent of Australia's total wine exports. Again, I do not think that is promoted sufficiently.

Regions like the Barossa Valley, McLaren Vale, the Clare Valley, Coonawarra, Langhorne Creek, Padthaway and the Adelaide Hills are internationally recognised for their exceptional wines. Their success translates into significant economic benefits for our state, including investment into regional infrastructure, support for local businesses and the creation of high-skilled jobs.

Beyond direct economic contributions, our wine industry plays a crucial role in attracting visitors to our state, with wine tourism generating millions of dollars annually through tourists patronising our exemplary cellar doors, restaurants and wine festivals. Events like the Crush Festival, Tasting Australia and myriad others showcase the best of what South Australia has to offer, in an effort to promote and reinforce our reputation as a leading worldwide wine destination.

Despite its strength, our wine industry has unfortunately faced considerable challenges in recent times. The tariffs imposed by China in 2020 had a significant impact on our wine exports, crippling our wine sales in that nation with Australian wine dropping from more than 27 per cent of the market share to only 0.14 per cent of China's imported wine market—a devastating drop. According to the Australian Bureau of Statistics, in the seven months following China's lifting of import tariffs in March last year, half a billion dollars worth of South Australian wine alone was exported to China. However, although this was a welcome development, the total volume of the Chinese market is not on its own sufficient to solve the issue of profitability within our wine sector.

The South Australian wine industry is contending with the issue of an ongoing surplus of wine and wine grapes, which is affecting many regions throughout our country, particularly those inland. This is compounded by a global reduction in wine consumption overall, with more people either abstaining from drinking alcohol or consuming less in volume and more of higher value, with wine losing market share to other premium drinks, including spirits. In addition, there are also issues of excess stock, which is reducing demand for wine grapes for wine production, placing pressure on wine grape purchases for the coming vintages. This situation has in turn led to a downturn and downward pressure on prices, and many if not most growers are being offered prices in some cases below the cost of production.

With growers already dealing with market uncertainty due to these conditions, there is also the added pressure on the price and availability of irrigation to water the grapes and to enable growing wine grapes in the irrigated regions due to the significant drought that South Australia is currently experiencing. Higher value crops such as almonds are able to outcompete wine growers in the purchase of water, and many growers are feeling compelled to sell permanent water allocations in order to pay down debt, which is of course adding further pain to their situation.

South Australia's wine industry is immensely valuable to our culture, economy and, might I say, our reputation. It is indeed a great source of pride not only to the regions in which our wines are produced but to our entire state. Every effort by our state and federal government should be made to ensure the industry is well supported and equipped to thrive as best as possible amidst any current and future challenges. I strongly commend the motion to the council.

Debate adjourned on motion of Hon. I.K. Hunter.