THE wine grape industry's peak body has called for a government-sponsored vine-pull scheme as a major wine company flags intake and price cuts of at least a third next year.
Constellation Wines Australia managing director John Grant told a conference in Mildura last week that his company planned to stop producing cheaper wines for the domestic retail trade and withdraw from "unprofitable export segments".
Mr Grant said this would cut the required intake of grapes by about 100,000 tonnes next year, with warm-climate grapes - more than 80 per cent of intake - to be cut by a third.
The company has already dumped contracts totalling 45,000 tonnes over the next two years, leaving another 55,000 tonnes in cuts to be made, and expects to pay 30 per cent less for wine grapes next vintage.
Prices in the Murray Valley averaged about $450 a tonne for red grape varieties and $300 a tonne for white grapes this year.
Wine Grape Growers Australia executive director Mark McKenzie told the conference that the industry's wine oversupply was "now chronic".
Mr McKenzie said up to 40,000ha of vines should be removed - most of it from cool-climate regions - but financial and climatic attrition would not achieve this quickly enough.
Chronic oversupply in the Australian wine industry last forced a government-sponsored vine-pull scheme in the 1980s.
This time, the WGGA favours a Dairy Adjustment-style scheme, with government funds up-front, and a wine levy used to repay the money over future years, he said.
But any hopes of government support for a vine pull were dashed yesterday by Minister for Agriculture, Fisheries and Forestry, Tony Burke.
"I've always said I don't believe I should tell farmers what to do with their own land," he said.
"I don't tell them what to plant and I don't tell them what to pull out.
"There is an oversupply on the world market which is why I've been working with industry to increase demand for Australian wines in Europe and Asia."
Murray Valley Winegrowers chairman Michael de Palma said there had been no good news for the 100 growers at the conference, with overseas markets contracting further as a result of falling consumer demand for wine.
"The overall feeling is we need to lose 20 per cent of the vineyard area to get back in balance, which is all well and good - but we're dealing with people, families and significant investment in vineyards over generations in some cases," he said.
