by Ken Gargett

Australia’s severe drought continues to impact the wine industry, with an estimated 5,000 grape growers struggling to stay in business.  A regional industry body, the Riverland Winegrape Growers Association, has found that nearly 60% of Riverland growers were considering leaving  the industry, “due to adverse conditions, including drought”.

The 5,000 grape growers are based around the Murray-Darling basin, the most important water system in Australia, stretching from Queensland in the northeast, through New South Wales and Victoria before entering the sea in South Australia. This region has been badly affected by drought and there may be worse to come.

“In the next few months, growers will be informed of their water allocation for the 2008-2009 growing season,” said Samantha Hellams, general manager of the Grape and Wine Research and Development Corporation. “With water supply at critical levels there is every indication that this allocation will not increase from last year – and in some cases it may be less It's quite possible that this lack of water could persist for a long time and growers may need to look at alternative business models or vineyard management strategies.''

The news for growers at the end of the Murray-Darling system in South Australia was marginally better, with the announcement by the River Murray minister, Karlene Maywald, confirming that water allocations for Murray irrigators would increase from the current 2% level to 6%, as a result of inflows in July into tributaries in New South Wales and Victoria. The minister noted that the government had been able "to ensure people that 100% of their carry-over water will be available from the 1st of September." She conceded, however, that 6% was inadequate for irrigators.

Compounding the problem for growers is the slowdown in exports, which saw volume down by 13% and value down by 12% to the year ending July 2008.

Grape growers in other regions are also expressing discontent, though not in the same numbers: 14% for the Adelaide Hills, 18% for McLaren Vale, 19% for the Barossa and 21% for Coonawarra, all of which are premium areas.