CNN
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Millions of vines have been destroyed in Australia, and tens of millions more have been destroyed to curb overproduction that is causing grape prices to plummet and threatening the livelihoods of growers and winemakers. The tree has to be pulled out.
The decline in global wine consumption has hit Australia particularly hard, where demand for its biggest commodity, cheap red wine, has shrunk fastest, and China, a market that until recently has relied on growth. .
According to the latest statistics, the world's fifth-largest wine exporter will have more than 2 billion liters of wine in storage as of mid-2023, or the equivalent of about two years' worth of wine, no matter who owns it. There is a rush to get rid of them, no matter the price, and some are showing signs of decay. .
“I don't want to grow a crop at a loss,'' fourth-generation grower James Cremasko said as he watched a rattling yellow excavator tear away rows of vines planted by his grandfather near the southeastern town of Griffith. There's no limit to how much I can continue,” he said.
Around two-thirds of Australia's wine grapes are grown in irrigated inland areas such as Griffith, where the landscape was shaped by viticultural techniques introduced by Italian immigrants who arrived around the 1950s. Masu.
As major winemakers such as Treasury Wine TWE.AX and Carlyle Group CG.O Accolade Wines refocus on higher-selling, more expensive bottles, the area around Griffith has fallen on hard times and been left unpicked. The grapes are sagging on the vine.
“It feels like the end of an era,” said Andrew Calabria, third-generation vineyard owner and winemaker at Calabria Wines.
“It's hard for growers to look out their back windows and see mounds of dirt instead of the vines that have been there for as long as they've known.”
Nearby, the remains of the 1.1 million vines that once made up one of Australia's largest vineyards were stacked in piles of gnarled and twisted timber as far as the eye could see.
Red wine was the most affected. Grape prices in areas such as Griffith fell to an average of A$304 ($200) per tonne last year, the lowest in decades, down from A$659 in 2020, according to data from industry group Wine Australia. It has fallen further since then.
The government, which expects prices to fall again this year, said it recognized the significant challenges facing producers and was committed to supporting the sector, but many claims it can do more.
Mr Cremasco said some of the red grapes sold for just over A$100 a tonne.
Up to a quarter of the vines in areas like Griffith need to be uprooted to balance the market and raise prices, said Jeremy, president of Riverina Winegrape Growers, a farmers' group in the region.・Mr. Kass said.
That would destroy more than 20 million vines across 12,000 hectares (30,000 acres), according to Reuters calculations based on Wine Australia data. This corresponds to approximately 8% of the total area covered with trees.
Growers and winemakers in other regions are also pulling vines.
“Even if half of Australia's vines are uprooted, the oversupply may not be solved,” said a Western Australian winemaker.
Still, many growers reluctant to pull their vines are incurring losses while hoping the market will improve.
“It's eating away at wealth,” said Tim Mableson, a wine analyst at KPMG, who estimates that 20,000 hectares (49,000 acres) of vines will need to be cleared across the country.
Due to health concerns, consumers around the world are reducing their alcohol intake and choosing more expensive bottles when drinking wine.
Major wine producing countries such as Chile, France and the United States are also suffering from oversupply, with thousands of hectares of vines uprooted even in prime locations like Bordeaux.
Australia lost its largest wine export market by value when China blocked imports during the 2020 political conflict. And unlike Europe, it does not provide financial aid to farmers to help destroy vines and excess wine.
China is expected to allow imports again this month, but the oversupply will not go away as Chinese demand has fallen much faster than elsewhere.
Wine Australia says that in the year to December 2023, wine sold for less than A$10 a liter – most of which is made from grapes grown in areas such as Griffith – sold for less than A$10 a liter. It is said to have accounted for two-thirds of Australia's wine exports worth A$1 billion.
Conditions are improving in some regions, such as Tasmania and Victoria's Yarra Valley, where more white wines and lighter, more expensive reds are being produced and becoming more popular.
But the entire area of Griffith is clustered with metal storage tanks, each holding thousands of liters.
“Everyone is trying to get rid of wine,” said Andrew's father, Bill Calabria, adding that wineries “are just letting go of wine” to make room for the next vintage.
Many growers are turning to citrus and nut trees instead.
Cremasco expects even greater profits from the prune trees he is planting on the degraded land, while the corporation Go Farms has planted more than 600 hectares (1,500 acres) of almonds nearby. It is also a substitute for vines.
“There will not be a next generation of family wine growers,” Cremasco added. “It’s all big business, and all the local young people are going to be working for big companies.”
