By Russ Badham

Martin, As always I enjoyed your argument and as always was interested in your very measured editorial comment with which I am almost always in strenuous and audible agreement.

I would however caution you against sweeping charges insofar as the whole wine / grape growing industry should not be characterised as adopting the aggression and immorality of some big companies; or as whinging primary producers seeking to park their tax freebee bucket under the milking cow of government handouts.

As you correctly note, the remarkable growth of our industry, (particularly in export), over the last two decades has led to massive plantings, some led by normal commercial considerations , some by tax advantage , and some of both of these at the instigation of ‘Collins Street Farmer’ types for whom I have no sympathy . The fact is however that an enormous amount of grape production in this country is the province of small ‘fruit blockies’ or farming families in districts as diverse as The Barossa, McLaren Vale, Sunraysia/Riverland, and the Murrumbidgee Irrigation Area.

There is nothing glamorous about what these people do now for a few hundred dollars a tonne, (if they still have a buyer), and there was nothing glamorous about what they did before they were enticed away from pursuits like dried fruit (sultanas) or citrus growing and into wine grapes.

These were the classic small people in agriculture who were at the mercy of international markets, the weather or government policy; any of which could deliver quality earnings or rip their livelihood apart at no fault of theirs. When the big wine guys ran around Australia with grape supply contracts it would later be revealed one could drive a tractor through, many of these little people grabbed the paperwork and rushed the banks who in turn believed the financial pages. (And did not read your column in 2000!)

The rest is as you say. They did not see the shirt front coming and could do little in the short term if they had. The big guys who needed them once, do no longer… Who was it who said that ‘when the elephants play the grass gets trampled.’?

It is fine to criticise those who purchased their moleskins and R.M Williams so they could wear them in their off road vehicles to check the vines in ‘The Yarra’, but spare a thought for the guys who are still in jeans and heavy duty work boots wondering if they should and / or can afford to graft their wine grapevines over to some other variety or pull them out.

One Robinvale Blockie I know has ‘on sold’ his water rights – encouraged by his bank of course – as this is the only asset left. Having not picked one grape off his 20 acre block in 2006 and taking little more than cost recovery the previous year he has no money to redevelop and so will let the vines die. If the twelve month, (also Bank inspired) effort to sell the place comes to nothing , he proposes to subdivide the house off the block so his family has somewhere to live, and simply walk off the land which is planted to non se-xy varietals which were nevertheless 100 percent contracted until 2005.

I am happy to get up the grocers who would turn icon wines into breakfast cereal status, and brewers who see their suppliers and products as transient and as dispensable as the latest advertising concept would dictate. I certainly encourage your continued cynicism in this regard. But don’t tar all the producers with the same brush.

And if we need a campaign about related issues, let’s not let the moronic Federal Agriculture Minister off the hook because a slush fund to bail people out is correctly rejected. But let him feel a bit of heat. After all he could support his natural electorate in the bush as well as his government’s real constituency at the top end of town, by adopting some real old fashioned government intervention and throw serious dollars at export market support and development here and abroad. It is after all good enough for right wing governments in France.

Let’s not pull the vines out, or prop up an industry with a short term over supply, let’s work a bit harder and smarter with serious government support to maintain and build exports.

by Martin Field

The good, the greedy, and the glut-tonous
Over a glass of good red we were talking a couple of weeks back about the Australian wine glut. Who in the wine industry wasn’t? The particular topic was news that wine industry lobbyists wanted taxpayers to fund a lazy $60 million bail out fund.

My drinking companion, a vigneron who has a small Victorian vineyard, makes his own wine and also sells grapes to big makers, was amazed. ‘Audacious!’ he said. ‘More bleeding snouts trying to get into the trough,’ I added. The government, in a rare stroke of wisdom, knocked back the bail out proposal, pointing out that nobody forced growers to plant their grapes in the first place.

Of course you have to feel sorry for growers forced to let their grapes rot after the suits at the big end of winetown tear up their contracts. And my winemaking friend told me that a well-known company he’d supplied did just that, wanting to take only part of a contracted vintage. He told them to stuff their deals up their de-stemmers and, luckily, found another, honourable, buyer.

The wine business is just a business, but unlike many others it’s seen as glamorous. That’s part of the problem. In the boom cycle it’s a magnet for cashed or borrowed up investors who see an industry offering an attractive lifestyle and a profitable business. Unfortunately they are often poorly advised and know little about winemaking.

And when the big profits do roll in these types swan around in luxury cars, get their buffed heads on TV infotainment shows and generally live the life of egotistical b-grade celebs. But you’ll never hear the wine high rollers say, ‘Thank you consumers for buying shiploads of our temporarily overpriced bottles. Here, take a few million bucks we’ve creamed off the top. Use it wisely to build new schools and hospitals for those less well off than us.’

In the inevitable bust cycle however, they immediately plunge into whinge mode and expect taxpayers to subsidise their losses, which often result from greed, bad planning, and even worse management.

The disastrous wine glut has been on the horizon for years, not least of all because companies, whose only business plan seemed to be chasing the easy dollar, planted grapes or encouraged contractors to plant grapes like there was no tomorrow. And given that situation you didn’t need to be an MBA, a clairvoyant, an economist or an industry analyst to know that the shiraz was going to hit the fan sooner or later.

Nearly six years ago, in September 2000, I wrote in a wine column, ‘My belief is that over the next few years we will see a glut of wine grapes with a consequent stabilisation, if not a fall, in wine prices. This can’t be good for winemakers but will undoubtedly please consumers. As for investing in a small vineyard to fund my retirement, I’d rather take up yachting. The latter pursuit has been likened to standing on one leg under a cold shower while tearing up $100 bills. It sounds like a far better investment than planting vines.’