Australian Prime Minister Anthony Albanese has reneged on his promise to support the struggling wine tourism sector, announcing this week that he will phase out the Wine Tourism and Cellar Door grant package, effectively wiping AU$10 million from the programme.
On Tuesday 12 May Labour Prime Minister Anthony Albanese quietly announced that he was axing a three-year Wine Tourism and Cellar Door programme across Australia, meaning the support package will come to an end after just two years.
The initiative allowed Australian producers to apply for grants of AU$60,000 to AU$100,000 to put towards staffing their cellar doors with employees to welcome guests and run tastings. This financial support has been propping up wine tourism in more remote agricultural regions as an already struggling sector was further hit by the fuel crisis triggered when Israel and the US attacked Iran. Rising fuel costs mean that tourists are often unwilling or unable to spend out on filling up the car to drive hours outside of major Australian cities, where many wineries are based.
“For many producers, this [the grant programme] is essential to maintaining cashflow and profitability. Ending it now effectively pulls the rug out from under businesses already facing enormous pressure,” said Lee McLean, CEO of Australian Grape & Wine, which represents producers.
“This budget is a bitterly disappointing outcome for an industry under significant and sustained strain.”
Continuing, McLean stressed: “We did not ask for a handout. We put forward practical, targeted measures to support an orderly transition, reduce long-term costs, and minimise the impact on regional communities. Once again, the Government has chosen not to act.”
Fuel crisis
Local MPs have also voiced outrage at the policy change, saying that the fuel crisis is chipping away at the country’s wine tourism sector with no resolution in sight.
“This [wine tourism] programme helped with cashflow and profitability, but Labour’s decision to end it will only increase the pressure wine growers are already facing,” said Matt Canavan, leader of Austalia’s National party.
“The Government has dismissed calls that the glut of wine sitting in vats could be turned into ethanol during a fuel crisis – Labour should heed the industry’s calls and review whether Australia’s excess wine stores could help alleviate our fuel supply crisis.”
Ben Small, Liberal MP for Canberra suburb Forrest was even more forthright in his response.
“To show how nasty this mob are to regional communities, they canned the AU$10m wine tourism and cellar door programme, originally announced with fanfare and applause,” he said.
“Our wine industry is crucial to the region because of the employment, investment, and the tourism draw that it provides…Of course, the Government found AU$3.7 billion to funnel into Victoria’s Suburban Rail Loop.”
TWE speaks out
Treasury Wine Estates CEO Sam Fischer told Australia’s The Daily Telegraph that he sympathised with the financial pressures on the government, but the scrapping of the cellar door programme would be a “blow” to communities.
“We acknowledge the significant global and economic pressures shaping this budget and welcome the government’s continued focus on trade, market access and supply chain resilience, particularly measures supporting fuel and fertiliser stability,” said Fischer.
“That said, it is disappointing that funding for the Wine Tourism and Cellar Door Grant programme will be phased out, despite Australia’s wine industry being a major regional employer and export contributor.”
Last month db reported that a spate of recent hirings, firings and retirings across Australia’s leading wine companies reflect the ongoing turbulence in the region. A major restructuring of TWE was also announced on 22 April that will see the Penfolds owner cease to operate by brand group and instead be reorganised into four geographical divisions: the Americas; Australia and New Zealand; Europe; and Greater China, with a combined emerging markets business covering the rest of Asia, the Middle East and Africa.
According to Fischer, this will “drive clearer accountability for performance and enable faster, more market-connected decision making as a foundation for consistent depletions growth”. Each division is expected to handle its entire product range “as appropriate to their markets”.
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