Home » Younger people aren’t drinking wine, and there’s too much for sale

Younger people aren’t drinking wine, and there’s too much for sale

There’s too much wine in the world.

That might not seem like much of a problem to those who enjoy a good drop, but take a drive through Australia’s inland grape-growing regions and you’ll quickly see how a global wine glut has created a crisis.

Excavators are ploughing through vines, some decades old and laden with fruit, as growers attempt to unburden themselves.

When Riverina grape grower Bruno Altin explains that farmers here have been receiving prices that amount to about 15 cents per bottle of red wine, you get a sense why.

“The label’s worth more than that, the bottle is worth more than that … The container deposit scheme is, you know, getting close to what we’re making. If someone can take a bottle and put it in a bin and make what we’re making, it’s pretty sad.”

Bruno Altin said farmers in his region have been receiving prices that amount to about 15 cents per bottle of red wine.(ABC NEWS: Matt Roberts)

Health-conscious young people aren’t hitting the bottle

So, how did we get here?

Appetites are changing and it seems younger people are no longer interested in becoming the soaks of their parents’ generation.

A new report from the International Organisation of Vine and Wine shows the world consumed 221 million hectolitres of wine last year.

It might sound like a lot but it’s the lowest level of consumption since 1996 when 2 billion fewer people roamed the earth.

According to Rabobank analyst Pia Piggott, wine-producing has now outstripped wine-consuming every year for the past decade.

“People are more health conscious, we’re also seeing demographic changes and particularly with younger generations, more competition in the drink space from other categories, so moving away from wines to other alcoholic or non-alcoholic beverages,” Piggott told the ABC.

Price drop for a good drop

Ms Piggott says in Australia’s inland regions — where most bulk wine is produced — prices for wine grapes have fallen 54 per cent over the past three years.

In the case of Riverland Shiraz, the most commonly grown variety, it is a price drop of 67 per cent since 2020.

That’s when Australia’s trade war with China began to exacerbate the problem.

Beijing applied massive tariffs to Australian wine, accusing the sector of anti-competitive behaviour; receiving subsidies and dumping wine for next to nix.

Of course, that was never proven and the tariffs, removed at Easter this year, were widely considered a political “up-yours” to the Morrison government, which dared ask for an investigation into the origins of COVID-19.

Almost overnight, the door slammed shut on a market worth $1.2 billion at its peak, leaving 6,000 wine grape growers across the country wondering what the hell had happened.

A man in a suit

Lee McLean from Australian Grape and Wine(ABC NEWS: Matt Roberts)

Lee McLean from Australian Grape and Wine, the industry body that represents those growers, and another 2,500 winemakers working across 65 regions, says the combination of a change in taste and the tariffs has led the sector to this “crucible moment”.

“The estimates are that there is around 500 million litres of red wine sitting in tanks, barrels and bottles around the country, which is an enormous amount,” he told the ABC.

“It’s the kind of stock-to-sales ratio that can’t be worked through with the reopening of any single market, even a really significant one like China.”

The way he says it, you get the sense that one could drink a bottle of shiraz three times a day from now until the end of time and it simply wouldn’t touch the sides.

A post at the end of a row of vines among other rows, with leaves dry and brown.

Australia’s wine grape growers are struggling to break even as the world drinks less wine.(ABC NEWS: Matt Roberts)

If Australia’s wine industry is to survive, it’s telling us, it must contract.

While Piggott estimates Australia’s area under vines could reduce by 8 per cent in the next five years, McLean says it could be as much as 20 per cent for some regions.

Growers ask for federal help to stop growing

So, how do you shrink an industry that’s spent decades expanding (at times incentivised through government initiatives such as managed investment schemes)?

It’s not cheap, for a start.

It costs about $7,000 per hectare to remove vines – partly because the treated pine posts are so difficult to dispose of.

Gone are the days of piling old posts up on the farm and lighting a bonfire, the posts either need to be re-purposed or sent to landfill.

The wine industry hopes the federal government will help, seeking $30 million to assist grape growers to no longer grow grapes.

An aerial view of a man walking along through a field of rows of vines.

Wine grape growers like Bruno Altin are seeking help as the sector experiences its most severe downturn.(ABC NEWS: Matt Roberts)

In its budget submission, it’s proposed a 4:1 funding ratio to help farmers pull out their vines and exit farming, or plant another crop – for horticulture enterprises that could mean another $30,000 per hectare.

If people can’t afford to exit properly the industry worries about the environmental impacts, and the risk that disease could spread through the vines.

Sadly, the horse may already have bolted on the health of some growers.

Jeremy Cass from Riverina WineGrape Growers can’t remember a more difficult time in his 30 years working in wine.

A man leaning on a post supporting a row of vines.

Jeremy Cass can’t recall a more difficult time for Australia’s wine producers(ABC NEWS: Matt Roberts)

“It’s horrible, horrible … we’re really worried about the mental health of these guys … it’s an industry we’re very passionate about and we like to protect people.”

Australian Grape and Wine is also seeking $36 million to boost exports and $20 million to pump up domestic tourism and cellar door enterprises.

A spokesman for the government indicated it’s unlikely to provide industry-specific support in this week’s federal budget, pointing out farmers can already access cheap loans through the Regional Investment Corporation and welfare payments, known as the Farm Household Allowance.