Lots of wine. Australian farmers destroy millions of vines

Australian growers destroy millions of vines and admit to destroying more. the reason? Overproduction drives down grape prices and threatens the livelihoods of farmers and wine producers.

Reuters reported that the decline in global wine consumption has hit Australia hard, as consumption is moving towards cheaper wine (the main product in Australia) and the Chinese market has witnessed rapid growth in recent years.

Australia is the world's fifth-largest wine exporter, with about two billion liters of wine recorded in 2023. Now, with two years of production in storage, wine owners are trying to move wine as quickly as possible, at any time. That there is surplus production ready for corruption.

“There is a limited amount of time to farm land and lose money on it,” noted fourth-generation producer James Cremasco.

According to the publication, major producers such as Treasure Wines and Carlyle Group are investing in more expensive products, as the market moves towards more expensive bottles. For this reason, and because they are losing money through their production, Australian regions like Griffith are uprooting millions of vines.

Reuters indicates that red wine was the most affected, as the price of a ton of grapes fell to 304 Australian dollars (184.20 euros) in 2023, compared to 659 Australian dollars (399.32 euros) recorded in 2020. Now, according to and based on the latest data. , the government expects a further decline in prices, while recognizing further (and increasingly important) challenges faced by producers. However, the executive was committed to supporting the wine sector in the region.

To balance the market and increase prices, a group of local producers admitted that a quarter of the vines in areas such as Griffith had to be uprooted. This means the destruction of more than 20 million vines on twelve thousand hectares, according to the agency’s calculations based on official data, which is equivalent to 8% of the total cultivated area in Australia.

Wine in Portugal

At the end of last year, the Association of Wines and Spirits of Portugal (ACIBEV) and the Nova School of Business and Economics (NOVA SBE) conducted a study on the wine sector and its socio-economic impact on the country, in order to present the importance of the sector in the economy.

Now, this same study has shown that the wine sector generates almost three billion euros of economic activity, directly, as well as 861 million euros in gross value added (GVA). In 2021, the wine sector was responsible for 43,000 jobs.

In 2021, viticulture alone generated €725.4 million in economic activity, €264.3 million in gross value added and 26,415 jobs, while wine production generated €2,278 million in economic activity, €597 million in gross value added and 16,619 jobs.

Thus, in the year in question, this sector represented a weight of more than 10% in terms of gross value added for 38 (out of 278) municipalities in mainland Portugal and more than 10% of employment in 43 municipalities on the continent.

Overall, considering direct, indirect and induced impacts, the total economic activity of the sector amounted to €10,294 million in 2021. Thus, the wine sector contributed €1,510 million to the state’s tax revenues, representing 2.68% of the national GDP.