things are tough

industry must quickly decide where it wants to be or risk losing the growers it cannot do without, says BRIAN ENGLEFIELD

Certainty and loyalty from the wineries who once depended on them are distant memories for Sunraysia wine grape growers.

This year's vintage is going to be extremely difficult.

Presently, uncontracted grapes do not have a market.

Recent calls from the Winemakers Federation of Australia for a 20 per cent decrease in wine grape production give a clear view of the problem.

The last three seasons have been a rollercoaster ride for grape production in Australia.

In 2006 about 50,000 tonnes of fruit were left unharvested in the Mildura region.

Then in 2007, production plunged by 400,000 tonnes, to a low of 1.4 million tonnes, before returning to a record high of 1.84 million tonnes last year.

There is a significant glut of wine from last year's vintage.

This, combined with a softening export market, particularly in the segments above the $45 (free-on-board) case price, is bad news for growers this vintage.

Wineries own roughly 25 per cent of Australian vineyards, which means independent private grape growers will shoulder the burden of any adjustment in the industry.

The recent extreme heat has significantly impacted on both fruit quantity and quality, but this is only like to make the season worse for growers.

This is because rather than responding to the tightening of supply by paying more for grapes, wineries are far more likely to penalise growers for heat-affected fruit.

Contracts in cool-climate areas that do not terminate until 2010-12 mean fruit from those areas will also be displacing big volumes of Sunraysia grapes.

There are contracts that terminated for Mildura growers after last year's vintage, with more ending after this year's and next year's vintages.

Some wineries in Sunraysia wrote new short-term contracts after the 2007 vintage, with new grower suppliers.

Sunraysia's long-term grower contracts are continuing to terminate.

A number of big wineries did not renew supply contracts this year and all wineries are indicating they are unlikely to renew long-term contracts.

This is of great concern, adding to financial uncertainty and destroying grower confidence.

Prior to last year's vintage, a major winery announced a planned reduction of 75,000 tonnes of intake, staged over three years. Of this reduction, 45,000 tonnes will be from growers in the Mildura district.

With a stated ideal crop of about 1.4 to 1.5 million tonnes, the industry is at risk if it continues to talk itself down.

The prospect of losing the wrong growers in the wrong region, with the right varieties, is a likely outcome unless the wineries and marketing executives promote the positive aspects that still exist.

Some of these opportunities come in the areas of sparkling, rose and low-alcohol wines.

Wineries require a base amount of grape production to supply the market and that is about one millon tonnes above the level of production that comes from winery-owned vineyards.

Grape varieties can be, and are, used in a range of products and labels, some of which may be further developed as markets continue to be identified.

Our industry needs to identify quickly where it wants to be, or take the risk that a fair proportion of the one million tonnes will disappear as the annual cost of growing grapes at prices at, or below, the cost of production quickly leads to permanent removal of vineyards.

Brian Englefield is a wine grape grower and former chair of Murray Valley Winegrowers