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business of wine, World Wine

Producers abandon SA #wine industry

 Kim Robertson

A growing number of South Australian wine producers are selling up and leaving as disease and the high Australian dollar batters the industry.

Transcript

PHILLIP LASKER: Disease and the high Australian dollar are battering South Australia’s wine industry, with a growing number of producers walking off the land. Many properties are selling for little more than land value as a wine glut caused by shrinking sales hits profits.

Kim Robertson reports.

KIM ROBERTSON: Leo Pech is hoping his 61st harvest on his Tanunda vineyard will be his last. The 73-year-old has had his property on the market for a year but there’s been little interest. After years of drought, diseases caused by the wet summer have devastated his crops.

LEO PECH, GRAPE GROWER: I have never seen the effects of downy mildew, powdery mildew and botrytis to such an extent as this year.

KIM ROBERTSON: With 60 per cent of South Australian wine sold overseas, increased prices caused by the high Australian dollar have shrunk foreign markets. After this season’s losses, many are choosing to walk off their farms.

A Barossa Valley real estate agent says he hasn’t seen so many vineyards on sale since the vine pull in the 1980s.

PETER FAIRWEATHER, REAL ESTATE AGENT: Probably the last 30 years to 35 years I’d say it’s probably been one of the hardest times we’d seen.

KIM ROBERTSON: With grape prices down more than 25 per cent on a few years ago, many are seeing buying a vineyard as a rash purchase. Of those vineyards that are selling, some are being sold for not much more than land value.

TOBY LANGLEY, WINE INDUSTRY BROKER: Vineyards that perhaps were purchased 10 years ago for $80,000 a hectare, that vineyard would achieve about $30,000 a hectare today so over a 10-year period it’s more than halved in value. Places like the Coonawarra, the Barossa, McLaren Vale, there’s been some very low sales.

KIM ROBERTSON: And the harsh reality is, the industry is set to suffer even more.

TOBY LANGLEY: I expect there’ll be more properties come onto the market after harvest because it’s just been such a difficult year and I think it’s going to mean people will look at their numbers and say I just don’t think we can continue.

KIM ROBERTSON: Despite the increase in vineyards on the market, industry analysts suggest there is a brighter future, with Chinese interest in the Australian wine market still on the rise.

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