Millions of vines destroyed as Australian growers face overproduction

Australia has been hit hard by the falling consumption of wine, which has also been noticed worldwide. 

For the cheaper reds, the country’s biggest wine product, the demand has shrunk fastest both domestically and in China – a market it has relied on for growth until recent years.

Losing money

As the world’s fifth largest exporter of wine, Australia had more than two billion litres, or about two years’ worth of production, in storage in mid-2023. As some bottles spoil, owners rush to dispose of it at any price. 

“There’s only so long we can go on growing a crop and losing money on it,” said fourth-generation grower James Cremasco as he watched clanking yellow excavators strip out rows of vines his grandfather planted near the southeastern town of Griffith. 

About two-thirds of Australia’s wine grapes are grown in irrigated inland areas such as Griffith. Its landscape was shaped by vine-growing techniques brought by Italian migrants arriving around the 1950s. 

End of an era

As major wine makers such as Treasury Wines and Carlyle Group’s Accolade Wines refocus on more expensive bottles that are selling better, the areas around Griffith are struggling, with unpicked grapes shrivelling on vines. 

A third-generation vineyard owner and wine maker at Calabria Wines, Andrew Calabria, said: “It feels like an era is ending. 

Nearby, the remains of 1.1 million vines that once comprised one of Australia’s largest vineyards were piled in heaps of gnarled and twisted wood as far as the eye could see. 

Red wine has suffered the most. In regions like Griffith, prices of the grapes going into it fell to an average of $200 a ton last year, the lowest in decades. 

Support

The Australian government, which forecasts lower prices again this year, said it recognises the significant challenges facing growers and is committed to supporting the sector, though many growers say it can do more. 

Cremasco said some of his red grapes sold for little more than $65 a ton. 

To balance the market and lift prices, up to a quarter of the vines in areas such as Griffith must be pulled up, said Jeremy Cass, head of Riverina Winegrape Growers, a farmers’ group. 

That would destroy more than 20 million vines across 12,000 hectares (30,000 acres), Reuters calculations based on Wine Australia data show, or about 8% of Australia’s total area under vine. 

Growers and winemakers in other regions have also been pulling up vines. 

Giving it away 

Health concerns are prompting consumers worldwide to drink less alcohol, and when they do drink wine, they pick pricier bottles. 

Chile, France and the United States are among the other large wine producers also grappling with oversupply, with even prime areas such as Bordeaux uprooting thousands of hectares of vines. 

When China blocked imports during a political dispute in 2020, Australia lost its biggest wine export market by value. Even though China is expected to allow imports again this month, that will not shrink the gap, as demand there has fallen much more rapidly than elsewhere. 

Some areas are faring better, such as Tasmania and the Yarra Valley in Victoria, which produce more white wines and lighter, but more expensive, reds that are growing in popularity. 

However, across Griffith, there are clusters of metal storage tanks, each holding thousands of litres. 

“Everyone is trying to clear wine,” said Bill Calabria, Andrew’s father, adding that wineries were “all but giving it away” to make room for the incoming vintage. 

Many growers are turning to citrus and nut trees instead. 

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