AUS: Wine grape prices collapse for inland growers

(ABC) - Wine grape growers in warmer inland regions are accusing the big wine brands of price gouging.

But the big winemakers argue they still have wine left over from last year, and can't afford to pay more for 2014 grapes yet.

"Oh they're (the prices) disastrous for the industry," says Mark McKenzie from Murray Valley Wine Grape Growers.

"We're now facing a full blown financial crisis. I really think the inland sector; the Riverland in South Australia, the Victorian Murray Valley and the NSW Riverina which represent 60-65 per cent of Australian production.

"They are 20- 50 per cent below 2013 vintage levels, and those levels were already below the cost of production."
The indicator price for chardonnay is $250/tonne, compared to $300/tonne last year.
The big wineries argue they still face a problems this year, because their wine vats are full from last vintage, and export volumes have fallen.
Mark McKenzie disagrees.

"In 2014 we are facing significantly altered fundamentals. We already have a 15 per cent improvement in currency position since last year.

"A number of countries are now shifting prices for particularly premium reds and chardonnays higher.

"Because they've had a big 2013 vintage in the case of Chile, but they've lost most of their 2014 vintage through frosts, and the French have finished probably their lowest volume vintage in 40 years.

"So to link our current prices to a short term of clearing bulk stocks of 2013, to use international prices as the benchmark for 2014 fruit, when they know these prices are well below the cost of production, is simply price gouging."

But the word in the wine industry is the wine companies still haven't recovered. In 2012, the top 9 wine companies together lost $85 million.