‘Relief’ for grape growers but job loss fears remain amid mass SA wine closures
Job losses are expected after an Australian drinks giant’s announcement on mass closures across the state as the state Opposition lobbies for a multimillion-dollar fund not touched for ten years to be uncorked.
An announcement by Endeavour Group yesterday that it was shutting down South Australian cellar doors and a bottling facility in McLaren Vale is sparking concerns across the state.
While news that the owner of Dan Muphy’s intended to continue buying premium wine grapes to create its suite of South Australian labels was welcomed there were fears job losses would impact the regions.
Announced yesterday, the operations of award-winning vineyards and cellar doors – including Chapel Hill in McLaren Vale – are among numerous SA wine sites being shut down by the owner of Dan Murphy’s.
But the Chapel Hill, Riddoch Coonawarra and Krondorf Barossa brands will be retained by Endeavour Group, and InDaily understands Endeavour will now move to negotiate buying grapes from those same vineyards to continue making its wine under the same brand names after the sales.
McLaren Vale Wine Region CEO Erin Leggat was “heartened” by the decision, which would “maintain the quality reputation of [Chapel Hill]”.
“This will be a huge relief to the many McLaren Vale grape growers who have supplied the winery with premium grapes for decades,” Leggat said.
Leggat was hopeful that buyers would be attracted to the assets up for sale in McLaren Vale, including the brand’s 150-year-old chapel and cellar door, which is slated for a late-June closure, and a bottling plant that is currently leased to Endeavour.
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“We’re hopeful that the two assets being sold, a high-end cellar door and functions venue and a bottling line that bottles up half the region’s production, are attractive opportunities for potential investors,” she said.
Fears for job losses remain, however, but InDaily understood the Vinpac McLaren Vale bottling facility – leased to Endeavour – would continue to operate for the remainder of the year. Leggat saying the closure could impact 35 to 40 jobs.
The company was hopeful it could transfer some employees from McLaren Vale to its other Vinpac plant in the Barossa Valley.
InDaily also understands it was likely there would be some redundancies as a result of the plant’s closure.
As for the workers at Chapel Hill, Riddoch Coonawarra and Krondorf Barossa, InDaily understands the brand’s owner hoped any employees of the vineyards and physical assets would be transferred to a new buyer post-transaction.
City of Onkaparinga Mayor Moira Were was “hopeful a new operator will take over Chapel Hill to continue the iconic winery’s legacy for years to come”.
“Of more concern is the proposed closure of the Vinpac bottling facility and its impact on jobs, and local bottling capacity and logistics for the region’s winemakers,” Were said.
“While more needs to be done for the wine industry, we’re buoyed by the fact that visitation remains steady to the wine region, and our celebrated local winemakers continue to win major awards on the state, national and international stages.”
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Calls for release of millions for wine industry
Liberal spokesperson for primary industries and regional development Nicola Centofanti called on the government to deploy cash in a regional development fund to support the industry that she said was “desperate for practical support”.
She said the government should release funds from the Rural Industry Adjustment and Development Fund, which currently holds close to $28 million.
Established in 1985, the fund was created to provide loans and grants, at ministerial discretion, to develop a farm, adjust farming methods or undertake a project or research for the benefit of farmers.
“I don’t necessarily think there needs to be new money,” Centofanti told InDaily.
“I’m calling on the Minister to have a look at this fund that apparently exists.
“I would have thought that the government should be, at the very least, examine every existing mechanism available rather than allowing funds to simply sit idle while these sorts of industries continue to suffer.”
Scriven told InDaily that the fund had not been used for ten years and its effectiveness was “limited” because of requirements to increase the interest on loans to commercial rates.
She also said the government had invested $3.1 million in the South Australian Wine Recovery Program to boost domestic demand and support vineyard waste management.
“If the Liberal Party was even aware the fund existed when they were in office, perhaps this limitation would explain why they did not utilise it at any time during their four years in government?” Scriven said.
“Wine grape growers can apply for low-interest loans through the Regional Investment Corporation, including Farm Investment loans which can fund capital expenditure to improve and diversify their operations.
“The Malinauskas Labor Government has been busy investing in a range of initiatives aimed at supporting South Australia’s wine producers to diversify and build new trade relationships, because that is what the sector has told us they need and we know that is essential to assist their ongoing recovery from Covid-era trade restrictions and the subsequent slow rebound in demand from China and the US.”
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