Downward pressure on grape pricing – is this our future?

On Tuesday 5 March 2024, ABAREs released its Agricultural Commodities Report showing sustained downward pressure on grape pricing in 2023−24 and a gloomy outlook, at least in the medium term.

Prices in Australia’s key production regions of the Riverina, Riverland and Murray Darling-Swan Hill are expected to fall substantially due to historically high carryover stocks of red varietals and declining domestic and international demand. Premium regions will remain steady.  Australian Grape & Wine’s Pre-Budget Submission to the Federal Government emphasises the significant economic challenges currently facing growers and winemakers and the need to grow demand at the same time as providing targeted support for growers to help them through these incredibly tough times.

The report highlights several contributing factors outside of our direct control such as global carryover stocks, falls in consumption driven by moderation and health concerns, and cost-of-living pressures. It does not, however, go so far as to speculate on the impact of any unknown changes to market conditions such as the reopening of the China market.  We would caution against too much optimism. China’s per capita wine consumption has plummeted in a short space of time. In 2022 consumption was just one-third of what it was at its peak 10 years earlier. In response, global import volumes have dropped, falling by 55% between 2017 and 2022. An article by Kym Anderson (2023) explains the changes in further detail. You can access that report here.

The expectation for softening prices in inland regions is consistent with Wine Australia’s grape price indicator. This indicator uses a range of data sources to provide an at-a-glance view of the most important indicators of price movements.

The only good news is that these reports are only a prediction of what will happen if we fail to adapt and if we fail to claw back market share from more innovative competitors such as spirits and beer producers.

In its last market bulletin, Wine Australia highlighted the fact that wine is under-performing against all other alcohol categories except cider. Wine is also expected to decline by more than all other alcohol categories in the next five years.

This is a problem that is not confined to Australia. Lack of recruitment of wine drinkers is a global phenomenon as our industry continues to fail to capture the Gen Z and Millennial market. As an industry with a proven record of global leadership and setting new trends in wine, Australia has a unique opportunity to address this problem before the rest of the world does.

The ABARES quarterly winegrape market report has been made possible by the Australian Government’s Improving Market Transparency in Perishable Agricultural Good Industries grants program. The grant enabled Australian Grape & Wine, the Inland Wine Regions Alliance and Wine Australia to collaborate with ABARES to help improve winegrape pricing information.  The March report drills down on the winegrape market in the greatest level of detail. You can access the full report at the link below:

Wine – DAFF (

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