Tony Pasin (Barker, Liberal Party, Shadow Assistant Minister for Infrastructure and Transport) Share this | Link to this | Hansard source

I move:

That this House:

(1) notes the current crisis facing Australia's wine grape growers;

(2) recognises that inland wine regions of the Riverland in South Australia, the Murray Darling and Swan Hill regions in New South Wales and Victoria, and the Riverina in New South Wales are being disproportionately impacted by the structural disequilibrium in supply of, and demand for, wine grapes;

(3) further notes that since 2021, average revenue per hectare of vineyard in these inland regions has dropped by 52 per cent;

(4) further recognises that many growers have been unable to cover their cost of production;

(5) acknowledges that without government intervention to support growers to adapt in this critical period, the wine grape growing sector will experience forced exits and widespread vineyard abandonment which can lead to significant biosecurity risks, attrition of younger generations in the affected areas, and adverse mental health consequences across regional communities; and

(6) calls on the Government to urgently support Australian wine grape growers with a targeted financial support package for eligible vineyard owners to adapt to changing market conditions.

The Riverland is Australia's largest wine region area by area and by tonnage. The Riverland GI is 4,105 square kilometres. It includes 22,032 hectares of vineyards. The main varieties grown in the region are shiraz, chardonnay, and cabernet sauvignon. The wine industry is one of the major economic drivers in the Riverland. It's worth around $400 million to the broader economy.

The region produces wines that are consumed in over 70 countries, from both commercial and boutique operators. The Riverland has traditionally exported as much as 3.6 million litres of wine, worth around $10.4 million. In the last decade, however, market factors have seen reduced demand for commercial wines from Australia, significantly impacting on the region. The lack of demand has seen prices for Riverland shiraz, cabernet and merlot fall from around $700 a tonne to just above $200 a tonne in 2023. I've also heard anecdotal evidence of prices as low as $120 a tonne. Prices are expected to fall further in 2024. There is a global oversupply of wine of about three billion litres a year—that's three times Australia's production. This is due to a number of factors: heightened awareness of the importance of health and wellness, competition from other alcoholic beverages, fewer wine drinkers drinking less wine, inflation, cost-of-living pressures et cetera. Australia has the equivalent of 859 Olympic swimming pools worth of wine in storage—that's close to three billion litres.

I wrote to the state and federal ministers in 2022 about the looming crisis bearing down on Riverland wine grape growers, then again in 2023, and again earlier this year. Each time I was met with a standard response talking about efforts to improve trade with China. This freight train has been bearing down on the industry and, despite calls for action over the past 18 months, state and federal governments have been too distracted, or too complacent, to notice. Growers are now at crisis point. Growers in the Riverland are rightfully angry. They've been ignored by those opposite, and now they're being told that trade with China will be the silver bullet that will fix all of their problems. This is blatantly dishonest and, quite frankly, insulting to multigenerational growers, who work their guts out to keep their businesses afloat. Those opposite need to level with growers. No single market will fix this problem.

Global wine production has exceeded supply since 2014. If we look to international examples, there have been plenty of attempts by various wine sectors to trade out of this global oversupply; they have all failed. As far back as 2006, France was dealing with excess production of some 750 million bottles of wine. Growers in Bordeaux have stopped tending to vineyards that are no longer economically viable. Bordeaux's wine industry estimates that 2,000 to 3,000 hectares of vines have been simply abandoned. Abandoned parcels can be reservoirs for the spread of disease. Today, Bordeaux faces the removal of a further nine per cent of the region's vineyards—some 9,500 hectares. Winemakers in Bordeaux are eligible for 6,000 euros per hectare in aid from the French government, either to help pay for the uprooting of their entire vineyard or to convert parts of their wine property to other agricultural pursuits. Well-established, mature markets such as Bordeaux can't even trade out of this crisis.

In the US, industry leaders have called for growers to remove 50,000 acres, around nine per cent of California's wine-grape-bearing acreage, to achieve market balance. The president of the peak industry group in California, Allied Grape Growers, says they are 'structurally oversupplied' and 'have to adjust their acreage down'. Without government intervention to support growers in this critical period, our sector will experience forced exits; widespread vineyard abandonment, which could lead to significant biosecurity risks; the attrition of younger generations in the affected areas; and adverse mental health consequences, quite obviously.

Government must stop wasting time and must urgently support Australian wine grape growers with a targeted financial support package to help eligible vineyard owners adapt to changing market conditions. We want productive, sustainable agricultural sectors that drive economic growth and feed the nation. I urge those opposite to support growers in the Riverland to keep growing. Don't let them flounder until they've got no choice but to sell their water as desperate sellers. Keep farmers farming.

Bridget Archer (Bass, Liberal Party) Share this | Link to this | Hansard source

Is there a seconder for the motion?

Sam Birrell (Nicholls, National Party) Share this | Link to this | Hansard source

I second the motion and reserve my right to speak.

Brian Mitchell (Lyons, Australian Labor Party) Share this | Link to this | Hansard source

I thank the member for Barker for this opportunity to speak about Australia's wine growers, and it'll probably be no surprise that I'll spend my time talking about the situation in my electorate and across Tasmania. It is a serious issue. Australia is the fifth-largest wine producer by volume in the world, and the hundreds of dedicated producers and the 160,000 people who work in the industry produce excellent product. It's some of the best wines in the world, in fact. In Tasmania, we have more than 200 individual vineyards, and the industry more broadly supports 3,600 full-time equivalent jobs. You may recall, Deputy Speaker, that I just gave my 90-second statement and congratulated Bangor on winning gold in the Australian Tourism Awards for the amazing work that they do with their very high-quality vineyard down there in Dunalley.

A report commissioned by Wine Tasmania at the end of last year found that Tasmania was the only state whose grape-growing workforce grew over the past decade, and it was up by 74 per cent. The same study reported the state's wine industry was tracking to grow to $2 billion annually by 2040. In 2022, the average value of Tasmanian wine grapes was a record-setting $3,237 a tonne, compared to the national average of $630 per tonne. Of course, as the member for Barker has indicated, many growers are now getting much less than that—indeed much less than the cost of production—for what they're growing. But in Tasmania it's a success story.

I'm always pleased to be able to celebrate the success of the industry in my home state, but we aren't being honest. We aren't being honest about the challenges the industry has been facing over recent years. The total value of Australian wine exports declined by 2.4 per cent to $1.9 billion in the year to December 2023. But the 2023 figures tell only part of the recent story, with exports down by one-third compared to 2021. The decline in exports has been caused, in large part, by ongoing trade disruptions in some of our major overseas markets.

The member for Barker doesn't want to hear it, but it's a simple fact that there has been major trade disruption. There are also other shifts occurring, with ongoing changes in consumer preferences having a major impact on prices for the traditional red grape variety that's prevalent in our inland grape-growing regions. It's also a simple case of supply and demand. There's a hell of a lot of supply and there's not the demand to feed the supply. It's basic economics.

But the government's primary focus is to support the industry to build long-term sustainable demand for Australian wine, through market diversification and expansion. Introducing and establishing Australia's world-class wine into new markets will help address the imbalance between supply and demand over the long term. There is no short-term fix, and I'll tell the member for Barker that there is no silver bullet. It's a long-term complex problem. Like in all agricultural industries, trade will continue to be critical for the future of our wine industry.

The government is helping industry to grow long-term sustainable demand for Australian wine, through improving market access and trade diversification. The Agricultural Trade and Market Access Cooperation program assists the industry to build long-term sustainable demand, with $3.3 million, through three grants, to Australian Grape & Wine and more than $1.1 million, through two grants, to the Australian Food and Wine Collaboration Group, which includes Wine Australia.

The government also continues to pursue ambitious free trade agreements and supports greater demand for Australian wine. The Australia-United Kingdom Free Trade Agreement entered into force on 31 May 2023, for example, eliminating all tariffs on Australian wine. Similarly, an Australia-India economic cooperation trade agreement entered into force on 29 December 2022 lowered tariffs significantly and established a joint dialogue, and the government is negotiating a more comprehensive agreement with India, which of course is a massive potential market.

Closer to home, the Wine Tourism and Cellar Door Grants program supports cellar-door operators to upgrade infrastructure, regional employment and increased demand for Australian wine. Round 5 of that program provided $10 million to 209 wine and cider businesses across the country, of which $500,000 was awarded to Tasmanian operations, including several in my electorate—Derwent Estate, Freycinet, Nocton, Pooley, Stefano Lubiana and Josef Chromy.

We are doing a lot to support the industry. We acknowledge the serious challenges the industry is facing. But we are there, standing with them, to shoulder the burden.

Sam Birrell (Nicholls, National Party) Share this | Link to this | Hansard source

I rise to support the motion put by the member for Barker and acknowledge the serious pain that is going on in his electorate and others due to a range of factors affecting the global wine industry.

The wine industry is a significant employer and economic driver in my electorate of Nicholls. We have a number of different wine areas. One is the Nagambie region, an hour-and-a-half drive north of Melbourne. It's got historic wineries and vineyards, such as Tahbilk, which still has vines that were planted in the 1860s and managed to survive the Barossa onslaught and are still producing today. There is also the more modern—when I say 'modern', I mean from the 1970s—winery of Mitchelton. It's not just the wineries in that region but all the contract growers that supply them. I also have the northern end of the Heathcote wine region, which is grown on the wonderful Cambrian soils on the Mount Camel range. Also, there are wineries over at Dookie. Dookie, where I did my agricultural science degree at the University of Melbourne, has been a significant player in research and development in the wine industry over the years.

The member for Barker is right: we face a terrible oversupply crisis. This has happened before, and there are issues with this. When a commodity is very much in demand, people want to grow a lot of that commodity. That's fine if we are talking about annual crops, but the challenge with horticulture is that it takes a long time to establish horticultural developments, whether they be apples, pears, peaches or, indeed, wine grapes. People put them in when the prices are good and they get some of the years of those good prices and then we end up sometimes with an oversupply. Some of the taxation treatment in the mid- to late 1990s of agriculture probably didn't help. I think that's something we can all analyse when we go forward and think about how we encourage agricultural production.

I want to talk about the impact also of the Murray-Darling Basin Plan and the changes that the new Labor government have made to that in going after extra irrigation water. These winegrowers are going to be on their knees. They are going to be what the government will call 'willing sellers', but they are not really willing at all. They will be forced to sell to the government through desperation. I have said in this place so many time since I was elected that, when you take that water away from these communities, what was once grown is no longer grown and there's a massive drop in production. It could be production of wine grapes but it could be production of something else. These communities rely on that irrigation water in order to be able to sustain themselves—the schools, the community facilities and the families who have lived there for generations. I am really worried about what happens when the government comes in and says, 'You're on your knees; sell us your water,' instead of going in and saying: 'The wine grape industry is going through a really difficult time. We want you to keep your water and we're going to help you to diversify into another industry.' If you do that then the community stays, the schools stay, the people stay, the employment stays and new crop and new industries are developed. I think a government with a long-term view of the future and that really cares about regional communities would do that. It would go in and say: 'Your industry, not through your fault, is really struggling at the moment due to a global oversupply. We are going to help you diversify.' What I worry about with this government is that it will say, 'You're on your knees; sell us your water,' and basically that will mean communities have a massive reduction in population and everyone goes to Adelaide or Melbourne looking for a job. That's not the Australia that I want to see. I want to see a government supporting Australian regional communities to weather these really difficult agricultural shocks.

It has been discussed that trade can improve the situation for the wine industry. Whilst that's true to an extent—and I commend the previous government on the free trade agreement negotiations—I don't think we can trade our way out of this. There's been a lot made of the relationship with the Chinese, but their wine consumption was declining anyway. I really think that the government needs to have a strategic approach. It needs to make sure it focuses on helping these communities, not trying to close them down.

Anne Webster (Mallee, National Party, Shadow Assistant Minister for Regional Health) Share this | Link to this | Hansard source

I rise today with a sense of urgency to speak to the member for Barker's motion and to address the pressing challenges facing our highly valued wine grape growers in my electorate of Mallee. Our wine grape industry is in crisis, and it is imperative that our growers are supported to ensure the sustainability of our regional communities. The Mallee is bearing the brunt of a structural imbalance in wine grape supply and demand.

The Murray Valley Winegrowers harvest report showed that independent growers were collectively paid 40 per cent less than they were in 2022. This equates to an average loss of income of $122,000 for each of the 300 wine growers in the region—well down from the $245,000 gross income during 2021. When you consider that some wineries offer growers as little as $120 a tonne and that production costs are about $300 a tonne, despite what on face value looks like a large gross income, many growers are left running at a severe loss. In Sunraysia, in the broader Murray Valley wine grape region, the Murray Valley Winegrowers chair, Chris Dent, said recently, 'We are such a powerhouse for the whole industry, regularly producing around 70 per cent of the national crush.'

Furthermore, the looming threats of forced exits, water buybacks and widespread vineyard abandonment pose not only economic risks but also significant biosecurity hazards and mental health consequences for farmers. I echo the sentiments of the Leader of the Nationals, David Littleproud, who rightly emphasises the need for fairness in the marketplace and to ensure that our farmers are not left to bear the burden alone. The proposed code of conduct for those that buy produce from Australian farmers is a step in the right direction, offering much-needed transparency and protection for our primary producers. In many cases, growers are not getting paid for as long as six months, highlighting the shortcomings of industry self-regulation in this instance of concentrated market power.

The Albanese Labor government must safeguard the future of our horticultural industry and the families that underpin it. In the Mallee, our wine growers are facing unprecedented challenges exacerbated by Labor's industry-killing water buybacks and the recent wine grape oversupply. These pressures have pushed our already struggling industry to tipping point, and Labor is standing idly by while our farmers and farming communities suffer.

In contrast, the coalition stands shoulder to shoulder with our rural communities. The coalition's Wine Tourism and Cellar Door Grants initiative gave wine grape growers practical support, and more than $760,000 was granted to 15 wine operations in the Mallee alone. This strategic support not only provided the necessary funds for growers to improve their cellar door offerings, but the grants improved the visibility and reputation of Mallee's wine production on a national and international scale. For regional Australians, an election cannot come soon enough. The coalition will address Labor's appalling ambivalence to our primary industries and farmers in particular. I'm proud to say the Nationals dragged a reluctant Albanese Labor government to hold an ACCC inquiry into the supermarket sector, and already the evidence coming forward demonstrates the need for reform.

What's Labor's solution for our farmers? Tax them more. The biosecurity levy before the parliament will hit these struggling wine grape growers with more of the cost of handling the biosecurity threat brought by foreign competitors sending their product into our country. The Nationals have pushed for a container levy to fund biosecurity, imposing the cost where the threat actually emerges, but, no, Labor wants to hit Aussie farmers for 10 per cent more than their 2020-21 levy contributions, kicking them while they're down. Unlike Labor, the coalition highly values the immense generational contributions of our wine growers to the cultural, economic and social fabric of regional Australia. Their resilience and hard work embody the spirit of our community, and it's our duty to stand by them in their time of need. I call upon the government to heed the voices of our wine growers and take decisive action to support the sustainability and prosperity of our industry.

Dan Repacholi (Hunter, Australian Labor Party) Share this | Link to this | Hansard source

I want to talk about Australia's amazing wine industry. It's a big deal globally, and it shows how dedicated and tough Aussies are. Australia is the fifth-biggest wine producer in the world, making some of the best wines ever tasted, and the Hunter Valley is a major contributor to that. Our wines are enjoyed everywhere, thanks to the hard work of over 160,000 people in this industry.

While we revel in our success, we must also confront the challenges that have beset us in recent years. It hasn't all been smooth sailing. We've been facing some really tough times lately. Our wine exports have dropped, and grape prices have fallen sharply. The total value of Australian wine exports declined by 2.4 per cent to $1.9 billion in the year to December 2023. But the 2023 figures tell only part of the recent story, with exports down one-third compared to 2021. The average red grape prices have dropped below the cost of production, from $650 per tonne in 2020 to $277 per tonne in 2023.

Changes in what people want and trade problems have made things tricky. The decline in Australian wine exports, coupled with the plummeting grape prices, paints a sobering picture. Trade disruptions and shifting consumer preferences have reshaped the landscape of our industry, demanding adaptability and innovation from all stakeholders. When they stopped, our exports to China were worth over $1.1 billion each and every year, and it was an industry that was growing in terms of the export potential. This week we have an interim decision which says that the wine industry will again be able to export to China freely. That will make an enormous difference for jobs, particularly in the Hunter.

I know that some of the wineries are under real pressure, yet, in the face of this adversity, the Australian government remains steadfast in its commitment to support our wine industry, through initiatives like the Agriculture Trade and Market Access Cooperation, ATMAC, program, which strives to cultivate long-term sustainable demand for Australian wine. We provide more than $3.3 million, through three grants, to Australian Grape and Wine, and more than $1.1 million, through two grants, to the Australian Food and Wine Collaboration Group, which includes Wine Australia.

The idea is to create a long-lasting demand for Australian wine by selling it to more places and making better trade deals. We are continuing to pursue ambitious free trade agreements and support greater demand for Australian wine. In May we entered into a free trade agreement with the UK which eliminated all tariffs on Australian wine. In 2022 we entered into a trade agreement with India which lowered tariffs significantly and established a joint dialogue, and we are currently negotiating a more comprehensive agreement with India.

But we are not just helping on the global stage; we are also supporting our own grape growers who are struggling financially. Programs like the Rural Financial Counselling Service offer help and advice to farmers and small businesses in trouble. Rural financial counsellors are qualified professionals who can provide support that is unique to a primary producer's situation, at no cost to the client. There are also special payments and loans to help them through tough times. Programs such as the farm household allowance and concessional loans from the Regional Investment Corporation provide essential lifelines to those facing economic hardship. The program has already provided over $800 million in payments to farmers and producers, including fortnightly payments and additional allowances, such as rent assistance, case support and farm financial assessments.

I'm particularly heartened by the collaborative efforts of all levels of government and industry stakeholders in establishing the viticulture and wine sector working group. This initiative underscores our collective commitment to address the challenges confronting wine grapegrowers, especially in inland regions such as the Riverland and Riverina. Through collaboration and cooperation we endeavour to devise effective solutions and chart a course towards a brighter future for our industry. There are challenges the sector continues to face, but it can be confident that the Albanese Labor government is working closely with the industry, state governments and Wine Australia to monitor the situation and ensure that growers have their rights—the right tools, support and information they need to make decisions about their future.

Aaron Violi (Casey, Liberal Party) Share this | Link to this | Hansard source

Firstly, I want to commend the member for Barker, not just for this motion but for his passion and advocacy on this issue. We can't overstate this: this is a crisis. When we listen to those opposite, it feels like that meme of someone sitting in a house when the house is burning and they say, 'Oh, everything's fine.' This is a crisis, and let's be really clear and understand that it's not just because of the tariff that China put on Australia. That's not the core issue at play here. When that tariff went on in 2020, France, Chile, Italy and Spain all saw declines in their sales to China. The Australian market stopped overnight and those four significant countries also lost sales. This is the structural challenge that the member for Barker has been talking about, and it needs a significant response. But we're not seeing a significant response from this government. That's the frustration for those on this side and for those in Barker in the Riverland who need support.

In my community of Casey we have the Yarra Valley, which is a strong wine-making region. In the 12 months to December of 2019 our exports were 1.4 million litres—about $25 million in value. China represented about $16½ million of that. In the 12 months to December of 2023, Yarra Valley exports were at 360,000 litres and $8½ million in value. In our community, we're fortunate; as the member for Barker knows, we're at the higher-end premium market. We've been impacted, but not as much as many others in the community. This is the frustration for growers and farmers. In this time of crisis the minister for agriculture won't go and visit communities and understand the challenges that they face. He won't visit and see firsthand the impact and the devastation for the families and generational businesses in crisis. He won't have the decency to visit them and at least offer some moral support if he isn't going to offer any financial support.

At a time when our industries are struggling and on their knees, there's another decision by this government that defies belief and defies common sense: the Export Market Development Grant program will not be delivered for the wine industry in the financial year 2024-2025. This grant is for individual businesses and representative bodies to drive export market development. This is a time when they need it more than ever; it's crucial for the industry—they're on their knees and this government is pulling a crucial program to deliver exports. I spoke recently with Wine Yarra Valley CEO, Caroline Evans, who, along with Barossa Australia, McLaren Vale Wine and Tourism Association, the Margaret River Wine group and the Adelaide wine region wrote to the Minister for Trade, the Hon. Don Farrell, about reinstating the program. They had an opportunity to meet with his office recently, and they were told, 'Too sad, too bad, bad luck.' There will be no program this financial year, for 2024-2025. If they're lucky, the government might announce a new program in mid to late this year for the next financial year, 2025-26.

I've talked about the challenges with China. The positive is that those tariffs are hopefully coming off. So, at a time when a market is opening to give a little bit of a hope, those development grants—that money—is crucial to re-entering that market. I've worked in exports before. It's not like the tariffs come off and tomorrow you walk back into Shanghai or Beijing and the sales are there. You've got to set up networks. You've got to re-advertise. You have to invest. This government is pulling export investments from an industry right when they need that money to invest. China is declining, as I've already said, but it's still a big market and it's better than nothing.

This is an example of this government not understanding agriculture and not understanding industry or exports. Our industry is in trouble. It needs support. It's not getting support; it's worse than that. This government is making their job even harder. The industry has been abandoned, and it is unacceptable. It's time for the minister to step up. (Time expired)

Rebekha Sharkie (Mayo, Centre Alliance) Share this | Link to this | Hansard source

There being no further speakers, the debate is adjourned and the resumption of the debate will be made an order of the day for the next day of sitting.