Even the Barossa Valley has not remained immune from the current imbalance in the supply and demand of fruit for Australian wine. Barossa shiraz, which by and large cropped more heavily that it was expected to in 2004, is now in the same boat as cabernet sauvignon from places like Margaret River, Coonawarra and the Yarra Valley. What does that mean? Some of it won’t find a home. How this issues affects different growers is very much a grower-by-grower situation, for it depends on the nature of the contracts between the growers and their purchasers, the wine makers. Those growers whose supply contracts are based on the area of vineyard tied to a given maker are in significantly better shape than those whose contracts are tonnage-related. In the latter case, wine companies are generally not accepting tonnages above previously agreed accepted levels for vineyards to which they are tied, and in some cases, actually own. This news comes in the wake of the purchase of uncontracted fruit by companies such as Casella and McGuigan Simeon at prices in the region of $250 per tonne, significantly below base contract rates. It has never been more obvious how dangerous it is to have a vineyard without a contract, and a good contract at that. To put that price into perspective, it costs around $200 per tonne just to harvest the fruit, which leaves any grower selling for $250 in something of a pickle, just to put it very mildly.
