Australian grape grower Tony Townsend destroyed half of his 14 hectares of vineyards last year.
Although the fields were healthy and vibrant, he estimates he would have lost about A$35,000 ($23,000) to harvest them. The heat wave has deterred them from pulling out the remaining vines, but they plan to finish the job once the weather cools. We will lose all the vines we have cared for for the past 10 years.
“I enjoyed being in the wine industry, but it just wasn't financially viable for me to continue down this path,” Townsend said from his farm, where heaps of discarded plants were waiting to be incinerated.
He lives in the Riverland, a region of South Australia that produces about a third of the crashes in the United States. Since 2020, rising costs due to the coronavirus and Chinese tariffs have combined to increase domestic supply and drive down prices. Townsend hasn't relied entirely on viticulture for his income, working part-time in the wine and food tourism industry, but not all farmers are so lucky.
“There are a lot of people who don't see a future in the wine industry,” said Linda Lowe, CEO of Riverland Wine, an industry group representing producers and winemakers.
It's a problem happening all over the world. Although global production reached a 60-year low in 2023, the oversupply of wine continues, indicating that the decline in demand is accelerating further. And while global consumption has lagged behind wine production since at least 1995, changing drinking patterns and lackluster economic conditions are likely to continue, according to data from the International Vine and Wine Organization. , the wine industry has reached an inflection point.
Stuart Spencer, executive director of the Roddy Weingrape Commission of the Central Valley, said California is currently experiencing “one of the worst supply-demand imbalances in 30 years.” Ta. Meanwhile, a November report from industry body Wine Australia said Australia had its lowest wine production in 15 years for the 2022-23 season, but continues to struggle with historically high stocks. There is.
Richard Halstead, chief operating officer of consumer insights at alcoholic beverage research company IWSR, said that in addition to the coronavirus, input costs such as fuel and fertilizer have increased due to the impact of the war in Ukraine, and insurance premiums have declined due to climate change. He also said that prices are rising.
“The recent sharp rise in input costs has destabilized a very delicate economic model for wine,” he said.
Meanwhile, age-related changes in drinking habits are taking root, and red wine is feeling the pain more acutely. Christophe Château, a spokesperson for the Bordeaux Wine Council, said more people are replacing red wine with low-alcohol sparkling, rosé and white wines. Gen Z consumers are also reducing their alcohol consumption, fueling the boom in non-alcoholic beverages.
In the Riverland, for example, many red wine producers, who account for nearly all of the region's production, don't expect to be able to sell it profitably this season, but some farmers are using their vines to produce products like almonds and watermelons. are being replaced by other crops. .
Jose says there is an oversupply of Rioja red wine in Spain. White wine is in high demand, said Luis Benítez, executive director of the industry group Federacion Española del Vino.
Farmers “will run into problems in a year or two because you can't turn red into white,” he says.
The French government initially allocated 200 million euros ($216 million) to help farmers across the country uproot their vineyards and send their wine to be converted into ethanol, giving each farmer 75 per hectolitre. promised euros. Bordeaux, a major red wine region, received additional funding to raise 9,500 hectares of land.
However, the supply disruption has not had a major impact. France will overtake Italy in 2023 to become the world's largest wine producing country. Chateau says enrollment in the ethanol program was so high that each farmer was only able to ship half of the amount they wanted.
In January, Bordeaux producers took part in widespread French farmers' protests that blocked roads across France over fuel subsidies and the scrapping of EU environmental policies. Grape farmers earned an additional 150 million euros by uprooting vines and planting alternative crops.
But adjustments are especially difficult for an industry like wine. Many winemakers go back generations and have deep-rooted traditions, but the nature of viticulture means long lead times and the grapes themselves cannot be easily sold or reused.
“What you plant today will fund your children's paychecks, or your grandchildren's paychecks,” Halstead said. “So when the market changes, it can be very difficult to react quickly.” A well-cared for vine can last more than 50 years, and investment cycles are measured in generations. That means there is a trend, he added.
Spiros Malandrakis, alcoholic beverage industry manager at Euromonitor International, said brands were also not doing enough to adapt to the new changes. For example, focusing on developing premium brands when people's budgets are tight means the industry is failing to develop a new generation of wine lovers.
“Without cheap, economical and reliable wine brands, people will ditch wine and turn to ready-to-drink cocktails and beer, or cheaper spirits brands,” Malandrakis said, adding that Gen Z's cannabis use added that it is having an impact. The appeal of wine has also diminished.
As a result, many farmers have no choice but to exit the industry altogether. A study conducted by Riverland Wine in 2022 found that around a quarter of producers in the region plan to exit within the next three years.
Once the vines are removed, Townsend plans to replant the barren land with native plants.
“The money that was supposed to be lost from the vines towards the end now gives me ten times the joy when I can see the native animals and birds returning to our land. They will give it back to us,” he said.
(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)
