Address to the Wine Australia Update 2022, Adelaide
It’s a pleasure to be here to listen to the current state of play for the wine sector—and to be back in beautiful South Australia. This visit means I’ve now been to every state and territory since being sworn in as Minister in June.
Given Parliamentary sittings, non-stop floods and biosecurity scares, it wasn’t easy, particularly for my diary manager! But I thought it was important to do, to understand the big issues in each corner of the country.
Let me start by acknowledging that we are meeting on the traditional country of the Kaurna people. I pay my respects to Elders of this country, both past and present, their cultural heritage, beliefs, and their relationship with the land. First Nations people were our first farmers, after all.
And what a location you have chosen for this meeting! You had me at ‘Wine’ but to come to the iconic Adelaide Oval is also a big plus. For me and millions of Australians, wine is something we enjoy, either for a glass on the back deck or to complement a great meal. I know that for you, though, it’s your livelihood, with very big stakes involved.
As Minister for Agriculture, Fisheries and Forestry, I speak directly with producers, processors and others across the supply chain in a range of industries, including yours. So far that has meant hearing from people like Tony Battaglene from Australian Grape and Wine, at one of my first industry roundtables as Minister, meeting with Wine Australia CEO Martin Cole and reps from the other Rural Research and Development Corporations, and a roundtable with Tasmanian winemakers in the Tamar Valley.
I will also be holding a roundtable with Australian Grape and Wine while I’m here in Adelaide today.
Listening to all players and working collaboratively are hallmarks of the Albanese Government and that’s certainly how I’m approaching my role as Minister. What I have heard from the wine industry is that – while we have strong foundations - many of you are enduring hard times right now.
I will deal with some of those challenges shortly, but first I want to acknowledge the success of this wonderful industry - both here and on the world stage.
To start with, despite everything, Australia is still the fifth largest wine producer by volume in the world.
And when it comes to quality, we easily have some of the best wines on the planet - evidenced by the medals and prizes you’ve won in the world’s leading wine shows.
Australia has a resilient wine industry, that is highly competitive, with excellent product.
You are an efficient, innovative, and high-tech industry.
Best of all, your resilience comes from your dedicated and driven producers and the 160,000 people who work in the industry.
For these reasons alone, I back the Australian wine industry and I’m proud to represent you when it comes to negotiations within government and on the world stage.
For a nation of 26 million people to be the 5th largest exporter of wine in the world - we punch well above our weight.
In the year to 30 September we exported 627 million litres of wine – equivalent to 836 million bottles – worth over $2 billion in export earnings.
Of course, South Australia is the biggest exporter, making up about $1.31 billion of the total figure.
But while we should celebrate the industry’s successes, we also have to be honest about the challenges the industry has been facing - for quite some time.
I want to assure you that I am keen to listen to the issues you’re facing and to hear your ideas on potential solutions.
I am committed to working with you to help your industry grow and recover from these challenges.
Challenges that started well before we were elected to government.
As you would know, in the last 12 months, while the volume of wine exported only dropped by 1%, the value dropped by 11%.
High tariffs haven’t helped, but there is no denying the negative impact of China’s trade bans on Australian wine, which have seen wine exports to China fall by 98% since 2020, costing the industry nearly $2 billion.
Sadly, these figures show the Australian wine industry has paid a heavy price for the deterioration in our relationship with our biggest trading partner.
We have been consistent that we want these trade blockages removed.
It is in both Australia and China’s interests.
We would prefer to resolve these trade blockages through sensible and mature discussion.
Now I know that there is great interest in yesterday’s meeting between Prime Minister Anthony Albanese with Chinese President Xi Jinping.
And I spoke to the PM last night, after that meeting occurred, and reflected on how significant it was to your industry.
This is a very positive step - the first such meeting between the two countries’ leaders since 2016.
There can be no doubt that our new government’s renewed mature engagement in the Asia-Pacific is beginning to repair relationships damaged by the previous government.
The Prime Minister has made clear that it is not in our country’s interest to have no dialogue with our major trading partner.
So we have begun work to repair that relationship with China.
There is a long way to go, and we have made clear we will always stand up for Australia’s values and our national interest, but this is a good first step.
I also acknowledge that the related issue of red wine grape oversupply, combined with volatile weather, biosecurity threats, COVID-related supply chain disruptions and increased freight costs, add up and put strain on your industry.
On all these issues, I have been in contact with industry reps, my Caucus colleagues from South Australia and the State Agriculture Minister, Clare Scriven.
While we know that wine is a very cyclical industry, the truth is that these challenges - especially the loss of the China market - will take some time to overcome.
Support through the challenges
But looking ahead, I’d like to share some thoughts on how I think the Australian Government can support you through these challenges.
Like all Ag industries, trade is critical for the future of our wine industry.
As I’ve said, our government will keep working to stabilise our trade relationship with China.
In the meantime, we know that wine - like all industries - needs to be agile, so that it can adapt and diversify into other markets when circumstances change.
And Government needs to create the settings for that to happen.
We will help you explore and expand new international market-access and grow demand for Australian wines.
Through trade-access, grants, supporting your workforce, protecting your crops through biosecurity investment, and helping you recover from natural disasters.
The industry already makes a $45 billion contribution to the economy, and a significant contribution to the prosperity of regional Australia, and we know it can grow.
Our government is continuing to provide boosted support for Australian agriculture, fishery and forestry industries to expand and diversify export markets through the Agri-Business Expansion Initiative (ABEI).
This initiative facilitates the Agricultural Trade and Market Access Cooperation—or ATMAC—program grants worth more than $2.8 million.
The grants help you to promote our wine in high-value markets and explore new markets.
This is in addition to $500,000 for the Food and Wine Collaboration Group which includes Wine Australia.
The ATMAC program has also helped create Country Manager roles for Japan and South Korea—and those two managers are here today.
Rosemary MacDonald and Suzie Chung will help grow the demand in these vital markets, and I understand that they’ll be more formally introduced to you all later this morning.
This is in addition to the roughly $15 million the Commonwealth contributes each year by way of matched levy funding for research and development for the wine industry.
Free Trade Agreements
So trade diversification is a key part of our Government’s trade agenda, and it will help your industry.
During the election, we announced the Trade Diversification Plan for Australian exports.
We are doing everything we can to implement the UK and India Free Trade Agreements, as soon as possible.
We are also committed to finalising the Australia-European Union Free Trade Agreement.
There have been 13 rounds of negotiations to date.
Australian wine exporters already enjoy preferential access to the EU market through the Australia-EU Wine Agreement.
We are re-negotiating this agreement with the EU, asking for simplified export certification and in-market processing.
We know this also involves some difficult issues, like the use of geographic indicators like Prosecco, and we will of course continue to work closely with industry on those issues.
Our negotiations with the EU will continue until we have a good deal.
We will not agree to a deal unless it includes substantial new market access for our key agricultural products—including wine.
Under the Australia-UK Free Trade agreement tariffs will be eliminated on wine and processes simplified for importing Australian wine into the UK.
Some export markets are improving, such as North America and part of South-east Asia—and there’s a long-term strategy for India.
Under the Australia-India Economic Cooperation and Trade Agreement, tariffs will be reduced on wine and preferential tariff treatment given to premium Australian wine imported to India.
We know there is more to be done to open up the Indian market, but you may have seen Landline on the weekend which explored the potential for India to be a massive market for Australian producers.
We need to do more and the ATMAC program is helping in this regard.
Also helping is the work our Trade Minister - and someone well known to the South Australian wine industry, Senator Don Farrell - is doing to enhance our standing in the global market.
You truly could not hope for a better international advocate for Australia’s wine industry!
Wine Tourism and Cellar Door Grants
Apart from furthering trade opportunities, we are also providing support at home.
As my wife will tell you, we have been regular visitors to many cellar doors over the years, everywhere from the Clare and Barossa Valleys here in South Australia, to the Granite Belt, the Yarra Ranges, Mornington Peninsula, the Hunter and the Tamar Valley.
These businesses are not only vital to your industry, but also to local economies through broader tourism attraction and consumer spending.
And I know the Wine Tourism and Cellar Door Grants program is important for wine businesses around Australia, and helps to encourage wine tourism, particularly in regional Australia.
I understand the industry has been keen to have certainty around this program, and I appreciate your patience as we worked through the Budget process, line by line.
But I am pleased to confirm that the Albanese Government is continuing with Round Four of the Program in 2022-23, providing $10 million for grants of up to $100,000.
Wine Australia has worked closely with my department to ensure the grant round will open before the end of November.
We also know that labour shortages have been a problem in your supply chain from vineyard to cellar-door.
This is something I heard firsthand from wine producers in Tasmania at my recent roundtable there and I’ve heard it in every part of the ag sector.
We are responding to those shortages.
We are working with the agriculture industry to address workforce challenges, while ensuring appropriate protections for workers.
In September, as part of the Jobs and Skills Summit, representatives of agriculture, meat processing and unions, agreed on a way forward to address these challenges.
This included creating a tripartite working group for solutions to better skill, attract, protect and retain workers in the agriculture and processing sectors.
The Agriculture Workforce Working Group commenced in October and will continue for 12 months to develop enduring solutions for this sector.
We held our second meeting yesterday, with some good suggestions put forward on training and migration.
The Summit also delivered other vital measures that will benefit agriculture, including lifting the migration cap, including a carve out for positions in regional areas, clearing the ridiculous visa backlog and bringing forward fee-free TAFE places, including thousands specifically in the ag sector.
But of course, in recent times—in some areas—all work has stopped due to floods.
I am also the Minister for Emergency Management and I acknowledge the horrible impacts of recent flooding on many of our wine regions.
I know there is great concern about what lies ahead, as the water winds its way down the Murray River system.
Just this morning I received a briefing from the South Australian Minister Joe Szakacs and the SA SES at the State Control Centre on planning for the big flood we know is coming.
The cumulative impact this has on the industry following a range of disruptions due to COVID cannot be understated.
It’s not only the impacts on the fruit and increased disease pressure, but inability to undertake maintenance and the interruptions to tourist-traffic through road closures, that also hits hard.
Rest assured we’re working closely with Wine Australia and the various state governments to ensure the Government is well-informed to respond quickly in such emergencies.
In conclusion, I acknowledge the many challenges facing your sector, and the difficult times those challenges have produced.
Despite them, though, I remain very optimistic about your industry’s future.
Before coming here today I reminded myself of the vision that Wine Australia has for itself and the Australian wine industry: to support “a competitive wine sector by investing in research, development and extension, growing domestic and international markets and protecting the reputation of Australian wine”.
The Wine Australia vision applies equally to my role as Minister in supporting our great wine industry.
When you’re my age you’ve been around enough to see our wine and grape industries in the good times and the bad.
But the industry’s incredible growth reflect a few things – like the dynamism of many people in the room today, your hard work and the hard-won reputation of the Australian wine industry across the world.
Everyone here today knows that Australian wine is the best in the world – as well as being a great example of a locally grown and value-added industry.
It’s my job to ensure that the rest of the world knows how great Australian wine really is – and to work with you all to protect and grow the industry into the future.
So thank you again for involving me in today’s discussions, I’m excited to speak with you all and learn from your experience in the industry.