Abandoned vineyards are creating a potential biohazard in Australia’s Riverland region, according to Charles Matheson, the Grower Engagement Officer of Riverland Wine.
He spoke last week to the ABC, Australia’s national broadcaster, telling them that the grapes left behind were increasing the risk that diseases like powdery and downy mildew could spread to other crops, including nearby citrus orchards.
While the Riverland’s suffering comes in part from a combination of severe flooding and Australia’s geopolitical issues with China, the situation is also a warning of what may happen in other regions around the world as the bottom drops out of the commercial end of the wine market.
The Riverland is a vast region of South Australia that runs alongside the Murray River. It’s an agricultural powerhouse, growing not just wine grapes, but also table grapes, citrus fruits, stone fruits and almonds, with fields and vineyards watered by irrigation drawn from the river. The wine grapes grown here mostly end up in bottles of cheap or big-brand wines, many of which are destined for the export market. (There are also wineries producing premium wine.) Altogether, the region contributes 32% of Australia’s wine crush, worth around Aus$400 million ($273m).
But the vineyards have been hit by disaster. First came the five-year wine tariff of 218% that China imposed on Australian wine in 2021, following a dispute between the two governments. Then came floods in December 2022.
While the ABC reported that only a small number of vineyards were hit, the impact on tourism and cellar door sales was significant.
Under extreme financial pressure, some vineyard owners have either put their properties up for sale—or abandoned them. The prospect of disease spreading from these untended properties is so far hypothetical but certainly possible.
“In the 28 years I have been doing this, I have never seen such an issue or suffered such a loss,” vineyard and winery owner Sandra O’Donohoe told the ABC, explaining that she and her husband Sam had lost 60% of their white grapes due to disease.
The big players are leaving
Grape growers and winery owners in the Riverland have faced economic turmoil before, particularly when grape prices collapsed in 2005. But now, even Australia’s major wine companies have lost faith in the region.
Accolade, Australia’s second-largest wine company, put Banrock Station’s vineyards and cellar door on sale in April, though the company wants to lease the 235-hectare site back. Banrock Station, situated in the Riverland, was acquired by Accolade (formerly Hardys Wines) in 1993 and became an early adopter of sustainability, touting its environmental credentials after the company restored the wetlands. The wines typically sell for under A$10, or less than £7 in the UK.
Other irrigated, commercial grape regions in Australia are also under pressure, with Treasury Wine Estates, producer of blockbusters like 19 Crimes, selling their Karadoc Winery in Victoria; it closes after 50 years, shedding 600 employees.
It’s not just the loss of China as a market that’s causing the problem—it’s also because of a slowdown in sales of commercial wines generally, particularly those selling for less than $10 a bottle.
The days of cheap wine are coming to a close
This is not just an Australian problem. Wine consumption is falling in major markets, from the USA to Germany, with repercussions for growers across the map. The reasons are many and varied, from the rise in health consciousness to the slowdown in the Chinese market to falling consumption generally. Inflationary pressures are also part of the story, with wine costing more because the price of glass, packaging and transport has risen. This has led to a paradoxical twist: normally, as prices rise, consumers reach for cheaper wines.
Instead, it’s premium and fine wines that are thriving; the global market for high-end wines hit €96 billion in 2022, according to the Financial Times. Despite recent reports of slowdowns in the secondary market, the primary market for €20+ wines remains strong; speak to importers in the US and they will tell you, off the record, that sought-after wines that sell for €30 in Europe will be bought and re-sold for hundreds of dollars the same week they go on sale in the US.
It’s the commercial wine segment, which should be benefiting from consumer price sensitivity, that’s unravelling. One of the earliest signs came when Constellation sold off around 30 entry-level US wine brands in 2021. As the Press Democrat reported at the time, the cheap wine segment was already in decline—making it an unattractive segment of the market for a publicly listed company. Things have only got worse since then.
Being in generic grape growing is a very bad place to be right now, and probably into the future.
In some parts of Europe, this is becoming a political problem. Take the Bordeaux wine protest of late 2022, when more than 1,000 vignerons drove their tractors into the city centre and hung an effigy from a tree, to symbolise winegrower suicides. They demanded support for a vine pull scheme, to which the government swiftly agreed.
As of June this year, Europe has—yet again—made funds available for crisis distillation, to remove the excess cheap wine from the market. The “drop in wine consumption for the ongoing marketing year are estimated at 7% in Italy, 10% in Spain, 15% in France, 22% in Germany and 34% in Portugal,” said the press release. “In parallel, EU wine exports for the period January to April 2023 have been 8.5% lower than the previous year, contributing to further increasing the stocks.”
The message is clear—being in generic grape growing is a very bad place to be right now, and probably into the future. This isn’t a problem to be solved by crisis distillation or other short-term measures. If governments and official groups really want to help, they should offer advice and finance to allow growers to replant, upgrade their vineyards, improve their products, and help build marketing and tourism initiatives—or do as the French have done, and help people uproot.
For some decades, the world’s wine authorities have repeatedly said they wanted people to drink less, but better.
As for the Riverland, no help is coming, even if all those unpicked grapes are attacked by rot, and they endanger other crops. That’s because the law won’t allow vines to be sprayed without the owner’s permission—it’s called ‘chemical trespass’—and “there are “a number of overseas owners that have abandoned their vineyards and just aren’t contactable,” Matheson told the ABC.
Growers and wine bodies elsewhere should heed the warning. For some decades, the world’s wine authorities have repeatedly said they wanted people to drink less, but better. Apparently, it’s finally happening—but many regions have been caught unprepared, and a disaster is unfolding.