Goodbye Stonehaven Wines....
http://www.news.com.au/adelaidenow/stor ... public_rssWine glut vineyards abandonedArticle from: Font size: Decrease Increase Email article: Email Print article: Print Submit comment: Submit comment NIGEL AUSTIN
October 12, 2009 12:01am
WINE companies are being forced to close their businesses and abandon vineyards as demand for their product dries up.
South Australia's wine industry has plunged into a deep crisis that threatens to claim hundreds of jobs.
Great Southern, Australia's largest agricultural investor until it went into receivership in May, has announced it has shut the gates on a large proportion of its 750ha of SA vineyards. Constellation Wines has said it will close its Stonehaven Winery at Padthaway, in the state's South-East, in November.
The announcement comes only months after it closed its Leasingham winery at Clare.
Industry leaders expect 6000ha to 8000ha of Australian vineyards will be left barren this year due to climatic and economic problems.
Prime vineyard land in McLaren Vale is reportedly set to be sold for housing.
Wine Grape Growers' Australia executive director Mark McKenzie said a large percentage of the grape growing and wine making community was in severe financial stress.
'"We have at least 20,000ha of vineyards more than we need," Mr McKenzie said.
The wine industry needed to cut at least 10 per cent of Australia's 177,000ha of vineyards from production, he said.
The fallout of the wine slump has delivered bargain-priced wines to consumers as companies look for new ways to offload unwanted grapes.
The crisis has been exacerbated by an export market crash from the $2.98 billion peak in 2006-07 to $2.35 billion in the past 12 months. The rising value of the Australian dollar is also making it difficult to sell wine to major overseasmarkets.
Mr McKenzie said the outline of a Wine Industry Restructuring Action Agenda had been presented to the Federal Government by four major national wine organisations.
"The Government has made it clear they won't get involved in an old-style vine-pull scheme," he said.
"An emphatic industry statement will be made at the end of this month showing the scope and location of the oversupply in the wine industry."
Mr McKenzie said research indicated a chronic oversupply of grape and wine production in Australia.
The closure of the 10,000-tonne Stonehaven winery on November 27 comes only 11 years after the $20 million plant and cellar door was opened with considerable fanfare.
Constellation Wines spokeswoman Sheralee Davies said 12 people would be made redundant at Stonehaven, which employed more than 30 people at its peak.
Stonehaven has failed to sell since it was placed on the market in August 2008.
Ms Davies said the Stonehaven and Leasingham brands were being retained and the wine made at its other SA wineries, Reynella, Tintara and Berri, depending on the fruit and its grade.
Great Southern was placed in receivership on May 20 and 750ha of vineyards in SA at Langhorne Creek, the Riverland, Barossa Valley, Adelaide Hills and Coonawarra have been on the market for many months.
McGrathNicol receiver and manager James Thackray said since funding for the vineyards ceased on September 30, it had been unable to undertake any further work on the vineyards.
"A report by a viticultural consultant has advised due to poor grape prices and the high cost of irrigation, the majority of vineyards within the scheme are not economically viable in the current market," he said.
Mr McKenzie said big vintages in the past two years, with another large volume harvest expected next year, indicated a further decline in grape prices. "We had a 30-50 per cent drop in grape prices last year and there are indications of a further 20-30 per cent fall this coming harvest," he said.
"The bottom line for growers is if they are out of contract and can't find a market for their fruit, they are facing extremely difficult market conditions in 2010."
Langhorne Creek grape grower John Follett said he was pulling out old chardonnay vines and would grow hay on the land until the industry improved