First up – farming protests in France and Australia
I discussed this in last week’s news but if you’re just joining us, French farmers set up roadblocks all across France last week to protest cancelled subsidies, strict environmental regulations, rising production costs and more affordable agricultural imports not subject to the same regulations as French products.
Protests continued to intensify until last Thursday, 1 February, when Prime Minister Gabriel Attal announced hundreds of millions of euros in aid with €80 million going to winegrowers. He also announced tax breaks on farms that are transitioning from generation to generation, promised that the French government will not ban any pesticides in France that are permitted in the rest of the EU, and banned imports that use pesticides prohibited in the EU. Several other concessions were made and on Thursday evening Arnaud Rousseau, president of FNSEA, France’s largest farm union, and Arnaud Gaillot, president of the young farmers’ union, had union members lift their blockades.
On 30 January, on the other side of the world, winegrowers in Riverland, Australia, drove tractors through the town of Renmark to protest the incredibly low prices of Riverland grapes. According to Wine Australia, Riverland is Australia’s largest wine-grape producer by tonnage and in 2023 it was responsible for 34% of the country’s total crush … however, along with Murray Darling–Swan Hill and Riverina, the country’s other largest winegrowing regions, it crushed 28% less in 2023 than in 2022. This was partially due to the lousy vintage conditions, which Max Allen has covered for our site, and partially to do with lessened demand that left fruit hanging in vineyards.
Lessened demand has created a drop in price. According to a quote given to ABC by grower Jim Giahgias, whose son Sava led the protest, in some cases growers are being paid a third of the cost of production and many are afraid that, due to financial pressures, 2024 will be their last harvest.
Accolade buyout
Wine producers are also struggling, and on 1 February, Accolade Wine Group, Australia’s second-largest wine group and the largest buyer of Riverland fruit (with huge brands like Hardys, Banrock Station and Berri Estates) was transferred from venture capital company The Carlyle Group to Australian Wine Holdco – a consortium of investors led by Bain & Co. This was not a traditional buyout. Instead, because Accolade is hundreds of millions of dollars in debt, The Carlyle Group transferred the debt to Australian Wine Holdco who took it on in exchange for equity. While Accolade has been bailed out for the moment, it seems highly unlikely that they will increase the prices they pay for fruit or expand their production, given that, less than six months ago, it was in legal battles with growers for not having paid for the 2023 crop.
All of those news stories reveal that growers and wine producers, especially large-scale operations, are not doing well. We have a global oversupply, and while a spokesperson for Australia’s Minister of Agriculture told ABC that Australia’s issue was the collapse of Australia’s exports to the Chinese market, that’s not the whole picture. If the issue was the Chinese market, wine sales would have done a global reshuffle and we wouldn’t be seeing things like the protests in France, the French government pledging €215 million to destroy surplus wine last year, Chateau Ste Michelle in the US cutting grower contracts by 40%, or a 24% decline in Chilean wine exports in 2023.
The sensitivity around wines’ global decline no doubt accounts for some of the inflamed tensions surrounding this next piece of news …
The uproar in Oregon
In 2021, the Oregon Health Authority commissioned a study from ECONorthwest on how a tax increase on alcohol would affect excessive consumption. A preliminary version of this report was given to the OHA in November 2021. But the report was not released to the state legislature, to their task force created to address excessive consumption, or to the public until news of it came to light in January 2024. Many representatives for the beer, wine and cider industries wonder if it was deliberately withheld.
According to the study, excessive alcohol consumption costs the state $2.6 billion a year due to pressures on social systems like the police force and healthcare system. So to curb excessive drinking and lower state costs, the state is considering increasing excise taxes.
However, liquor stores in Oregon are state-owned and provide the state with its third-largest source of funding, much of that coming from the sale of hard liquor. But the proposed excise taxes would be levied only on beer, wine and cider. The study states on page 25 that, in the tax scenario laid out, consumers would likely switch to spirits as they would be relatively more affordable. Because of the likelihood of trading down to cheaper options, the investigated tax would curb excessive drinking by less than 1% – making it largely ineffective.
The study puts forward a number of recommendations in its conclusion, including introducing an ethanol-based tax to shift consumers towards lower-ethanol products (rather than the volumetric one they investigated) or equalising increases in taxes on spirits to avoid consumers shifting to spirits …
Overall that sounds fair for the wine industry, right?
Yes, but part of the reason the late release of the study was so poorly received was that in mid 2022, without having published that study, the state launched a campaign called ‘Rethink the Drink’ whose mission statement reads, ‘Rethink the Drink is an initiative of the Oregon Health Authority’s Public Health Division. Our goal is to decrease excessive drinking and the harm it causes individuals, families and communities throughout our state.’
Most of Oregon’s wine industry was onboard with that message – until the campaign aired a commercial in which, while grocery shopping in the wine aisle, a child asked her seemingly sober and responsible father why she can’t drink wine. He tells her that it’s bad for her; she then responds by asking why it is OK for him and he doesn’t have an answer and so puts the bottle of wine down and they walk away. The commercial doesn’t give resources for those who are excessively consuming and the message seems to be ‘stop drinking’. The ad did not feature liquor.
I’m going to leave you to draw your own conclusions on this. I have far too much skin in the game.
Finishing with a glorious piece of news …
67 Pall Mall’s launch of the Global Wine Communicator Awards
Richard Hemming MW, head of wine for 67 Pall Mall and writer for JancisRobinson.com has founded a new wine communication award that was announced last Wednesday. The Global Wine Communicator Awards is the first I’ve seen to section communication into six categories, covering long-form writing, short-form writing, long-form video, short-form video, audio, and an award for communicating across all three mediums. So whichever way you choose to communicate about wine, you are eligible to submit. And applications are open!
Judges come from all different communication mediums and countries. The judges’ chair is writer Elaine Chukan Brown, who is joined by social-media influencer Isis Daniel (both from the US), writer Max Allen (from Australia), Vino-Joy News founder Natalie Wang (from Hong Kong), wine celebrity Olly Smith (from UK) and YouTuber Konstantin Baum MW (from Germany).
This is a transcript of our weekly five-minute news broadcast, which you can watch below. You can also listen to it on The JancisRobinson.com Podcast. If you have breaking news in your area, please email [email protected]. And if you enjoy this content, and would like to see more like it, please subscribe to our site.
