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Riverina seeks recognition

Long regarded as Australia’s ‘grape basket’, producers in the Riverina are yearning for greater recognition.

As Australia finds it increasingly difficult to compete in the entry-level, bulk export market, the focus on premium wines and building a name around the ‘Riverina’ is of growing importance to growers in the region.

Recent reports surrounding inherent unprofitability in many Australian wine regions are especially pertinent when applied to Riverina.

According to the Australian Wine and Grape Authority, profitability in ‘Warm Inland’ regions has deteriorated between 2012 and 2014. In 2012 3% of wineries in these regions made a low profit, 14% broke even and 85% were unprofitable – none were in profit. Last year 94% of wineries were unprofitable, 4% broke even and just 2% made a little profit.

Riverina is a particularly bad example with 98% of wineries making a loss between 2012 and 2014.

Part of the problem is the rising cost of production, with the cost of producing a tonne of grapes rising from AU$540-648 in 2012 to AU$545-654 in 2014.

As Bill Calabria of Calabria Wines in Griffith explained recently, during Australia’s boom days in the 1990s growers could reasonably expect AU$1,000 p/tonne but with the rise of the Australian dollar and reduced demand in major export markets the price has tumbled to AU$250-300 p/tonne and, said Calabria, in the worst cases growers have accepted just AU$100 p/tonne.

The matter is compounded by the cost of water needed for irrigation in Riverina. Back in the 1950s and ‘60s a megalitre of water (one million litres) cost just AU$40-50, now it’s AU$3,500-4,000 making the annual water cost of a winery of farm around AU$800,000-1m a year.

Throw in as well wages of AU22.50 an hour on average and electricity costs of AU$180,000 p/a as well as tax and the tight margins demanded by multiple retailers Coles and Woolworths which dominate the Australian off-trade and it’s no surprise many wineries are working at a loss.

As a result, Calabria admitted that many farmers have “walked away” but several producers encountered by the drinks business on a recent visit seemed confident that a corner had been turned in the region’s story thus far.

“Griffith is very underestimated,” said Calabria, “we’re known for bulk wine.” But, he added: “We have the best water and the best climate [for grape growing], we don’t need chemicals – none of my growers have sprayed this year. We’re not organic but we’re as close as possible to it.”

Bryan Currie, senior winemaker at McWilliam’s Hanwood Estate, told the drinks business that the region “can’t escape volume” but that the focus was now on promoting the region and its top wines.

“Over the next couple of decades it’s going to continue but it’ll never be a quick process.”

Although in Australia he thought there may be some “bias” against Riverina because of its bulk wine associations, conversely in export markets this was unlikely to matter as despite having drunk millions of litres of wine from the area during Australia’s ‘sunshine in a bottle’ days – the name ‘Riverina’ hardly ever appeared anywhere on the label.

“There’s no bias against Riverina as they don’t know what it is,” he said.

“You will see more wines coming out of here of higher quality,” agreed Sam Brewer of Yarran Wines, “we can’t compete in bulk [anymore]. There’s a really good opportunity to make better wine at AU$10-20 a bottle. We’ve found it successful. It’s not economically viable to produce cheap booze, I have to produce something better. The next stage is to produce another small range, more expensive again to help add some credibility to what we’re doing.”

For Brewer part of the region’s future is expanding into “alternative varieties” – if you pick wisely.

“Going forward, if you plant the right varieties you should come out alright,” he said, adding though that, “as much as the alternatives have a place, there’s still a high domestic demand for the old favourites so we’re trying to do them well too.”

With a strong Italian heritage a lot of replanting recently has centred on varieties such as Vermentino, Pinot Grigio and Nero d”Avola as well as varieties such as Verdelho, Touriga Franca and Nacional and the increasingly popular Durif or Petite Sirah as it is also known.

As in the UK the popularity of Pinot Grigio as a “quaffing wine” is on the rise in Australia (from a small base) and producers are increasingly turning their hand to it.

“The area does lend itself to Pinot Grigio,” said Victor de Bortoli, export director at De Bortoli. ‘Verdelho has been planted here since the 1990s as a partner to Chardonnay and performs well in the region, giving lots of tropical fruit etc.”

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