The South Australian government has announced a $109 million support package for the state's struggling wine industry, the ABC reports — with $100 million of it dedicated to loans helping growers transition away from grapes and into other crops.
Premier Peter Malinauskas announced the package on Friday. Eligible growers will be able to access loans of up to $500,000, with no principal or interest repayments required for the first two years; the loans are split into two groups, with smaller growers able to access up to $250,000 and larger entities up to $500,000. Interest after the first two years is expected to sit at 7.2 per cent. The package also includes $2 million for the disposal of chemically treated wine posts, measures to address wine surplus inventories, and a two-year extension of the Global Wine Growth Program to drive international demand.
Grape growers across Australia have pleaded for support since the start of the pandemic, when the industry experienced a major glut of red wine due to China's ban on Australian wine imports and a global downturn in wine consumption — a slump that saw Australian wine exports fall to their lowest level in 22 years. SA is home to several major wine regions, including the Barossa Valley, McLaren Vale and the Riverland — and the Riverland numbers are stark. According to CCW Co-operative Limited, 72 per cent of the region's wine grape operations recorded losses in the most recent season, with some red wine grape growers receiving $150 per tonne against production costs of $300 per tonne.
"If you travel round [our region] there's a lot of vines that are just turned off, and they're not pulled out," said Riverland Wine chief executive Andrew Weeks. "There are people still making up their minds as to whether they want to continue growing grapes or whether they want to try and get out of the industry altogether or transition to something else, so hopefully this provides some cause for optimism for people to start making plans."
Liberal MP and ex-Riverland wine grape grower Tim Whetstone said the support was something he had been calling for over years. "I've seen the hardship that my constituency and the region have been through over [the last] four to five years," he said. "Growers are in a state of paralysis at the moment, not understanding where to go and what that support will mean for individual businesses." Shadow Primary Industries Minister and Riverland resident Nicola Centofanti echoed his comments but questioned the 7.2 per cent interest rate once the two-year reprieve concludes: "It appears to be more of a commercial rate than a concessional one."
Freestone Estate chief executive Lucy Clements said she believed about 10 to 15 per cent of SA wine grape growers had already left the industry in recent years — but called the announcement "a pivotal moment for all South Australian growers and winemakers, and it's the start of a journey of recovery".
Mr Malinauskas said the package — developed through consultation with key industry stakeholders — was designed to provide an equitable way forward for everyone working within the $2.4 billion industry. "The wine industry is [central] not just to the state's economy but, frankly, to the state's identity," he said. The premier said the response had deliberately not been rushed: "We're ultimately talking about an oversupply, which is different to a natural disaster, so it's got to be thought through very carefully how we calibrate this response."