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House of Assembly - Fifty-First Parliament, Third Session (51-3)
2009-02-04 Daily Xml
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WINE INDUSTRY

Mr VENNING (Schubert) (15:53): The extreme hot weather over the past week has caused serious damage to our wine and grape industry, particularly in the Barossa and McLaren Vale regions—to what extent, we are not quite sure yet. The Barossa harvest began last week, with red grapes which would normally not be harvested until the end of the month now being harvested. I have been told that realistically some growers in the Barossa will lose their total yield, particularly those who are not irrigating at all, and the Barossa as a region will probably lose about half its total production. Mark McKenzie from Winegrape Growers Australia on radio yesterday said that South Australian yields will be down by at least 100,000 tonnes from the estimates made in December.

Growers in my electorate are extremely distressed. They are facing many problems and they are not alone. I attended a Murray-Darling Association meeting in Berri last week and the growers in the Riverland are equally concerned and anxious about their future. I also note that the Minister for Water Resources (Hon. Karlene Maywald) attended, as well as Senator Bill Heffernan from New South Wales. Oversupply is the big problem facing the industry. Despite the heatwave destroying about 20 per cent of the state's crop, the oversupply problem will not be rectified. Management investment schemes (MISs) have been the large contributors to the oversupply problem. They are flooding the market and pushing down prices. Winemakers have warned that grape prices could fall as much as 30 per cent this year.

The global financial crisis is further compounding the problem, as wineries are finding it difficult to sell their wine overseas and they are cancelling their contracts with growers; many have held those contracts for many years. I know one grower who has 750 tonnes of grapes but has sold only 28 tonnes.

The state Rann Labor government needs to step in and provide some assistance to the industry that provides so much revenue to the state. The government stepped in and offered assistance to the Mitsubishi workers; what about helping out the grape growers? Last year, 1.8 million tonnes of wine was produced when only 1.5 million tonnes were needed. For many years, Mr Leo Pech, a fourth-generation grower from the Barossa, has been advocating that the tax incentive to plant vines (the 75AA tax laws in relation to MIS schemes) should have been abolished years ago as this has led to the enormous oversupply problem. He should have been listened to five years ago. In an article recently, he said, 'I believe that the vintage for 2009 will be the worst for growers in the history of the industry since it was formed in 1788.' The Managing Director of Angove's winery concurred, 'I agree for the growers it is going to be a diabolical vintage,' and it certainly seems to be starting out that way.

The industry was facing many problems before this heatwave struck, and growers do not need another worry on their mind. I appreciated the comments made by Senator Bill Heffernan, and I note that the Hon. Nick Xenophon was also at the meeting. I asked why the previous Liberal government did not pull back section 75AA three or four years ago, and it quite floored me when he said that the grape growers' lobby was not successful in making politicians listen.

The Hon. R.J. McEwen interjecting:

Mr VENNING: When you read the Senate inquiry's report, which Senator Heffernan chaired, one recommendation was that they reform their lobby group and have a formalised lobby. I believe that the trouble in the past was that governments took much notice of the wine producers and not the grape growers; there should have been an area in the middle.

I am not playing politics with this, as it is too serious for that. I heard the minister's interjection a while ago, and I am not disagreeing with what he said. I am here to do the best for my growers. I shudder to think how I would feel. As a grain grower, I have other options for my product but, when you grow grapes, you do not have any options: you have to pick them. They are going to pick these grapes and put them on the ground. Even with the cost of picking them and watering them, they will go on the ground. It is terrible. A lot of people who have money will make their wine—

The Hon. R.J. McEwen interjecting:

Mr VENNING: The minister says I am talking doom and gloom. I am happy to hear the options, minister, but there are not many; however, I will do what I can. To all those grape growers out there, I want to say that I understand the problem and that if I could do something I would. I will listen to and advocate any suggestion the minister might make. I am with the growers.

Time expired.

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