Struggling wine industry gets more funding poured in

A state government has announced funding to support a troubled $2.4 billion wine industry grappling with oversupply, lower grape prices, changing demand and rising costs.

South Australian Premier Peter Malinauskas said the $108 million package would help growers transition unviable vineyards to other crops and expand an export campaign to exploit the gap in Canada's market, created by its trade war with the US.

Speaking in the Barossa Valley on Friday, the premier said global structural change in the industry had created an exceptionally large oversupply of wine, and "the impact for the Australian industry has been profound".

The industry has also struggled with years of drought, and with China's crippling ban on Australian wine, which ended in March 2024.

The central plank of the package is a $100 million loan scheme to help growers wanting to transition unviable vineyards to more sustainable and higher-value land uses.

Loan recipients will not have to make any repayments for two years and the loans would be made at concessional interest rates.

Another $5 million will extend and expand the Global Wine Growth Program for two years to drive international demand, while a $675,000 advertising campaign will showcase SA's premium food and wine.

"Canada is a growing market for reasons that I won't offer any personal opinion of," he said.

"But for reasons that are self-evident, Canadians aren't drinking American wine where they once used to, and that gives Australians a really big opportunity to put our wine on Canadian shelves."

The SA Wine Industry Association's Lucy Clements said the package was a pivotal moment "and the start of a journey of recovery".

"The wine industry has been touched by very hard times recently … and we are at the heart of that in South Australia," the Freestone Estate chief executive said.

"I am fortunate enough to travel widely globally, meet with buyers all around the world.

"So having the runway and the support to do that globally is just such a blessing - and Canada is absolutely part of that story."

The package also includes $2 million to seek a waste solution for treated timber posts, including establishing storage sites, and $1 million over two years to provide growers with planning advice on industry transition.