The World Has Too Much Wine, And Farmers Are Ripping Up Vines

(Bloomberg) -- Australian grape-grower Tony Townsend destroyed half his 14-hectare vineyard last year.

The fields were healthy and vibrant, but he estimates he would have lost about A$35,000 ($23,000) to harvest them. While a heatwave is holding him back from ripping out the rest, he plans to finish the job once the weather cools — losing all the vines he’s tended for the past decade.

“I enjoyed being in the wine industry, but it was just economically unviable to continue this way,” said Townsend from his farm, where a pile of discarded plants is waiting to be burned.  

He lives in Riverland, a region in South Australia that produces about a third of the nation’s crush. Since 2020, a convergence of Covid-fueled cost increases and Chinese tariffs has pushed up supply and depressed prices in the country. While Townsend was never fully reliant on grape growing for his income and works part-time in wine and food tourism, not every farmer has been so lucky. 

“There’s a lot of people that don’t see a future in the wine industry,” said Lyndall Rowe, Chief Executive Officer of Riverland Wine, an industry group representing growers and wine makers. 

It’s a problem that’s playing out all around the world. Though global production hit a 60-year low in 2023, a wine glut is persisting, signifying that demand is falling even faster. And while data from the International Organization of Vine and Wine show that global consumption has lagged behind production of wine since at least 1995, the industry has hit an inflection point as changing drinking patterns and lackluster economic conditions look here to stay.