Aussie paradox Last drought F UTURE P ROSPECTS Developing trust - - PowerPoint PPT Presentation

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Sep 17, 2023 260 likes •401 views

M ARKET F ORCES IN THE R IVERINA G RAPE I NDUSTRY M URRAY D ARLING A SSOCIATION 74 TH N ATIONAL C ONFERENCE T HE R IVERINA R EGION 20,485 hectares wine grapes (64 varieties) 53% whites, 47% reds Major varieties: Chardonnay,

SLIDE 1

MARKET FORCES

IN THE

RIVERINA GRAPE INDUSTRY MURRAY DARLING ASSOCIATION 74TH NATIONAL CONFERENCE

SLIDE 2

THE RIVERINA REGION

20,485 hectares wine grapes (64 varieties)
53% whites, 47% reds
Major varieties: Chardonnay, Semillon, Pinot Grigio,

Shiraz, Merlot, Cabernet Sauvignon

328,000 tonnes (30% winery owned) in 2018
320 Winegrape grower business (650 in 2000)
Farm Gate Value approx. $113 million (2018)
18% volume, 10% value, nationally (2018)

SLIDE 3

SLIDE 4

WHO IS THE RIVERINA

Riverina processes 25% of all Australian wine
The engine room of the wine industry
Home to: Calabria, Casella, McWilliam’s, DeBortoli,

Warburn, Berton’s, Yarran, Dee Vine, Wickham Hill.

6 of the top 20 wineries in Australia
Local production in 2018 equates to: 27 million cases
Home to the Wine Grapes Marketing Board a NSW

Statutory Authority representing growers since 1933

SLIDE 5

THE MARKET

95% of regions production sold locally
Family owned business dominant
Competition issues rising eg. 1 buyer takes 45%
Perishability of the crop a limiting factor
Voluntary Wine Industry Code largely ignored
Desperate for better regulation in the market
ACCC investigating current business practices

SLIDE 6

WATER IMPACTS

Majority of growers hold High Security entitlements
75% of the region using drip systems
Average growers use 4.3 - 4.7ML/ha
Top Growers can use 5.2 - 5.6ML/ha
Excess entitlements can be lucrative eg Temp trade
Many have expanded using excess entitlement
Some need to purchase annual allocation

SLIDE 7

DEMOGRAPHICS

Dominate migrant population
Ageing population avg 65+
Low number of generational growers
Average grower has other commodities
Small farm size dominant 26ha
Both owners generally work fulltime

SLIDE 8

GRAPE PRICE PRESSURES

Issue of sustainability
Planted area decreasing
$ per litre v $ per hectare

2018 Highlights sustainability issues

Whites 17.6 tonnes per hectare (7.1t/acre)
Reds 14.4 tonnes per hectare (5.8t/acre)
COP $3,500/acre (including viable return)

Price required Whites: $492 Reds: $603 2018 Average Whites: $348 Reds: $464

SLIDE 9

PROFITABILITY LINKED TO YIELD

Avg. $492

SLIDE 10

PROFITABILITY LINKED TO YIELD

Avg. $603

SLIDE 11

French paradox Aussie paradox Last drought

SLIDE 12

FUTURE PROSPECTS

Developing trust in the industry important

▪ Industry Codes, Consultative meetings

Truth in pricing (sharing of wealth)

▪ Provisions to allow price disputation

Export growth strong, China, US

▪ Need to maintain relationships

Cost of replanting need resourcing

▪ Rootstocks needed, labour intensive

SLIDE 13

POSITIVE MESSAGES

Family owned wineries have a long term focus
Water security in the MIA is beneficial
Location to major ports and markets good
Land availability good and fit for purpose
Potential for the Riverina to be Australia’s largest