Water shortages put 1,000 growers at risk

27 August, 2008
Page 6 
Up to 1,000 wine grape growers in Australia may disappear within a year due to low prices and water shortages, the country's growers' union has warned.

Between 800 and 1,000 growers were under "immediate threat of financial failure", said Mark McKenzie, executive director of Wine Grape Growers' Australia.

Growers in the Riverland area of South Australia, Murray Valley in Victoria and those in New South Wales are at the highest risk.

"This is a consequence of four years of falling wine grape prices, which has left many growers with revenues below their costs of production," says McKenzie

Prices for Australian wine are expected to rise this year, after the country's worst drought on record ensured a smaller harvest.

But, following this reverse, McKenzie said growers' revenues would be affected by limited production, and also the need to buy in extra water.

Around half of growers in the Riverland and Murray Valley have not purchased water, potentially jeopardising the quality of their harvest.

Australia's 2008 grape harvest will be lower than predicted - at 1.22m tonnes instead of 1.47m - and reduced harvests are expected for the next five years, according to a recent supply and demand report by the Australian Wine & Brandy Corporation.

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