Australia allocates 109 million to reduce wine surplus and convert vineyards

Friday, September 18, 2026

The South Australian government announced on Friday, September 18, a AU$109 million package to support the transition of the wine sector and address an industry pressured by oversupply in international markets, falling grape prices, shifting demand, and other market challenges. The regional government estimates the economic impact of this industry at AU$2.4 billion, accounting for 80% of Australia's premium wine production and supporting over 90,000 jobs across the wine value chain.

The bulk of the plan will consist of a publicly backed loan program with a budget of 100 million Australian dollars. The government explains that these loans will be aimed at winegrowers who want to convert unviable vineyards to higher-value, more stable land uses. Each eligible producer will be able to apply for up to 500,000 Australian dollars and will not have to repay principal or interest for the first two years.

Another component of the package focuses on exports. South Australia will allocate 5 million Australian dollars to extend for another two years a program to boost international trade and increase demand for its wines abroad. This is complemented by a 675,000 Australian dollar advertising campaign to promote the state's food and wine offerings and increase tourism to the wine-producing regions.

For the beverage industry, this part of the plan has a direct impact. If foreign demand improves and some vineyards are successfully converted, the measure could help reduce pressure on prices and employment in one of Australia's main wine-producing regions. This potential effect would benefit not only grape growers, but also wineries, exporters, distributors, and the wine tourism sector.

The package also allocates AU$2 million to find a solution for wooden posts treated with chromated copper arsenate (CCA), a common vineyard residue. The plan calls for collaboration between the state government, local councils, and the industry to study a solution and create regional collection and storage points. In addition, AU$1 million, distributed over two years, will be used to provide independent diversification advice to growers, and another AU$500,000, also over two years, will be used to assess and develop industry-driven solutions to address excess wine stocks.

The government will also create the position of a wine industry coordinator. Their role will be to identify obstacles to an orderly transition and improve relations between businesses, government agencies, and regional stakeholders. In addition, there will be planning changes in Riverland through an amendment aimed at the area's economic recovery. With this amendment, the government intends to provide land for housing and employment and open up new land-use options for winegrowers.

The South Australian government says the package was prepared after consulting with key industry representatives at a forum convened in August by the regional premier. The government adds that these measures complement other support already in place from the state and federal Australian governments.