Accolade urges growers to accept buyout offer

By James Bayley

Published: 16 April, 2024

Accolade Wines, Australia’s second-largest producer, has offered to buyout grape supply contracts to combat oversupply in the Riverland region.

The company, which was taken over by a consortium of US investors in February, has made an offer to the CCW co-operative, its grape supplier of 25 years, to reduce volume requirements.

Under the terms of the new agreement, Accolade would be obligated to buy 80% of CCW’s current volume, the equivalent of 150,000 tonnes of grapes. Previously the contract stipulated that Accolade had to purchase all available supplies.

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The offer to CCW amounts to AU$4,000 per hectare for growers wanting to leave the industry. According to the Australian Financial Review, growers could make up to AU$8,000 a hectare during peak times.

CCW members will vote on the offer at a meeting next month.

Accolade Wines CEO Robert Foye said: “As an industry, for us to continue as if no response is required simply isn’t sustainable. We have a shared responsibility to face into this challenge and respond.”

In the wake of mounting economic strains within the region, wineries have offered grape growers rates as meagre as AU$120 per tonne – a figure that barely scrapes the surface of production costs. Remarkably, this rate harkens back to the standard set in the 1970s, indicating the regression in the industry’s economic landscape.

Such circumstances prompted swift action from the South Australian state government, in collaboration with Riverland Wine, to extend a lifeline to the industry. Immediate and direct assistance in the form of emergency grants, amounting to a maximum of AU$1,500, is being dispensed to alleviate the industry’s immediate burdens.

“This additional funding to assist grape growers help cover routine costs through this challenging season continues our strong commitment to South Australia’s growers and local industries that underpin regional communities,” said Clare Scriven, South Australia’s minister for primary industries.

“The support work through Rural Business Support will provide assistance to the wine industry which has been heavily impacted by disrupted market conditions and global oversupply.”

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