Since the Federal budget’s fifty five per cent tax hike on wine, I’ve traveled widely through major wine growing regions: the Hunter Valley, Cowra, and Griffith in New South Wales, Great Western and Mildura in Victoria, and Coonawarra, Padthaway, and the Barossa Valley in South Australia.
Beneath all the refreshing hustle and bustle of activity, runs a deep vein of gloom and uncertainty. The Government’s ill-considered, anti-investment tax grab was bad enough but the ensuing uncertainty regarding its passage into law undermines the confidence of one of Australia’s few rapidly expanding rural industries.
What a contrast between depressed, wheat-and-wool-dependent Narrandera (6 families forced off the land in the week we passed through, we were told) and grape-growing areas like Griffith, Coonawarra-Padthaway, and the Barossa Valley, all buzzing with activity.
What we’re seeing in viticultural Australia is an unprecedented expansion, driven by rising exports, and underpinned by domestic sales and a supreme technical competence, acquired over the past twenty years, in vineyard and winery.
All that technical wizardry means quicker returns for investors, provided the market is there for the finished product. In twenty years, we’ve climbed so far up the learning curve that planting a vineyard and making good wine from it can be achieved within four years, given adequate capital.
A good example is Orlando-Wyndham’s 222 hectare Richmond Grove Cowra Vineyard mentioned in this column last week. It was planted in 1989 and produced its first commercial wines in 1992.
Even more striking in this age of cost cutting and gloom is to drive through the vast limestone plain stretching from Mount Gambier to Padthaway and across to Robe in southeastern South Australia.
The area embraces Coonawarra and Padthaway but other plots, big and small are going in all over the place. At June 30, 1992, Coonawarra had 1,913 hectares of vines in bearing and another 555 planted. At the same date Padthaway had 1,687 bearing and another 128 in the ground. More have been planted in the year since the ABS released these statistics.
While smaller plantings are sprinkled throughout the area, several major projects are up and running or under way. Brian Croser’s 25 hectare ‘Sharefarmer’s’ vineyard just over the Coonawarra boundary is in full production and being extended.
That’s dwarfed by Mildara’s new plantings under the direction of Vic Patrick. Vic’s wandered up and down the limestone plain for twenty years, enthusiastic about the region’s grape-growing potential.
Just north of the Coonawarra boundary, earthworks have commenced on Mildara’s 120 hectare red vineyard on a high bank of terra rossa soil to the east of the main road. Further east, a 320-hectare chardonnay vineyard is under development and a little higher in the Narracoorte Ranges, another beautiful 120-hectare bank of terra rossa is to be planted to red varieties.
Patrick sees the two red blocks as outstanding and, while they are outside Coonawarra’s boundaries, sees no reason why they won’t produce wine at least as good as Coonawarra’s. Vic’s view is encouraged by the quality of grapes from the long-established Koppamurra vineyard not far from Mildara’s new holdings.
Further north, towards the edge of the limestone plain near Bordertown, Bob Hesketh’s and Mark Swann’s 200-hectare Cuppacup vineyard, leased by Penfolds, reached full production this year.
And in Padthaway, the eye sees vast spreads of young vines, the most conspicuous being Orlando’s 110 hectare fresh planting on the Lawson’s Vineyard.
All these new vines in the ground represent money invested to the tune of $20,000 a hectare for development (not including land) plus another $5,000 a hectare in maintenance before the first grapes are harvested.
New investment accounts for a great deal of the prosperity now apparent in our leading grape-growing areas. But it’s not prosperity in the sense of seeing fat, cigar-munching millionaires cruising around in limousines. It’s a prosperity employing people directly and in all the peripheral industries supporting grape growing and wine making.
Investment in vineyards necessitates further investments downstream: as extra grapes come on stream, wineries need increased crushing, fermentation, and storage capacity; bottling and packing lines must be expanded; bottle production rises; graphic designers and printers employ more people; and there are more people needed in transport, distribution, sales and marketing.
In many areas, farmers distraught with low returns on traditional activities are turning to grapes for a viable future. Given the breadth, depth, and long-term nature of investments already committed and under contemplation, the wine industry is quite justified, in my view, in its anger over the proposed increase in wine tax. No one fully understands its impact, but the feeling is it will be wide, deep, and finally throw happily self-reliant people onto the welfare list.