Last year, Australian winegrower Tony Townsend destroyed half of his 14-hectare vineyard.

The fields are healthy and vibrant, but he estimates he will lose about A$35,000 (US$23,000) harvesting them. While the heat wave has prevented him from pulling out the remaining vines, he plans to complete the job once the weather cools down – losing all the vines he has tended over the past decade.

“I love being in the wine business, but it’s not financially viable to continue this way,” Townsend said at his farm, where a pile of abandoned plants awaits burning.

He lives in South Australia’s Riverland region, which produces a third of the country’s production. A combination of rising costs due to the coronavirus and Chinese tariffs has pushed up supply from that country and depressed prices since 2020. While Townsend has never relied entirely on grape growing for income and works part-time in wine and food tourism, not every farmer is so lucky.

“A lot of people don’t see a future in the wine industry,” said Lyndall Rowe, chief executive of Riverland Wine, an industry group representing growers and wine producers.

This is a problem all over the world. Although global production hit a 60-year low in 2023, a wine oversupply persisted, meaning demand fell faster. While global consumption has lagged wine production since at least 1995, according to the International Organization of Grape and Wine, the industry has reached an inflection point as drinking patterns change and economic conditions falter.

Stuart Spencer, executive director of the Central Valley Lodi Wine Grape Council, said California is currently experiencing “one of the worst supply and demand imbalances in 30 years.” Meanwhile, Australia’s wine production for the 2022-23 season will be its lowest in 15 years, but stock levels remain at historically high levels, according to a November report from the Australian Wine Industry Group.

Richard Halstead, chief operating officer of consumer insights at alcoholic beverage research company IWSR, said that in addition to the new crown epidemic, the war in Ukraine has led to higher input costs such as fuel and fertilizer, and climate change has led to higher insurance premiums.

“The recent sharp increase in input costs destabilizes wine’s very fragile economic model,” he said.

Meanwhile, long-term changes in drinking habits are taking root, with the pain from red wine intensifying. Christophe Chateau, spokesman for the Bordeaux Wine Council, said more people are drinking low-alcohol sparkling, rosé or white wines rather than red wines. Gen Z consumers are also drinking less alcohol, fueling a boom in non-alcoholic beverages.

In the Riverland’s case, Rowe expects many red wine producers – which account for nearly all of the region’s production – to be unable to make a profit selling their wine this season, while some farmers are replacing vines with other crops such as almonds or watermelons.

José said there is an oversupply of Rioja red wine in Spain. Luis Benitez, director general of industry group Federacion Espanola del Vino, said demand for white wine was high.

Farmers “will have problems within one to two years because you can’t convert red grapes into white grapes,” he said.

The French government initially allocated 200 million euros ($216 million) to help farmers across the country plant vineyards and convert their wine into ethanol, promising each farmer 75 euros per hectolitre. Bordeaux, a major red wine region, received additional funding to cultivate 9,500 hectares of land.

But supply disruptions have not had a major impact. France will overtake Italy in 2023 to become the world’s largest wine producer. Chateau said there are so many people participating in the ethanol program that each farmer can only sell half the amount they want.

In January, Bordeaux growers joined wider French farmer protests against the removal of fuel subsidies and EU green policies, blocking roads across the country. Grape growers also won €150 million to uproot vines and plant alternative crops.

But for an industry like wine, the adjustment is particularly difficult. Many winemakers go back generations and are steeped in tradition, while the nature of grape growing means lead times are long and the grapes themselves cannot be easily sold and repurposed.

“What you plant today will fund your children’s wages and even your grandchildren’s wages,” Halsted said. “So when the market changes, it can be very difficult to react quickly.” He added , a well-maintained vine can last more than 50 years, which means investment cycles are often measured in generations.

Spiros Malandrakis, alcoholic drinks industry manager at Euromonitor International, said brands were also not doing enough to respond to the new changes. For example, focusing on developing premium brands at a time when people’s budgets are being squeezed means the industry is failing to educate a new generation of wine drinkers.

“If you don’t have cheap, affordable, reliable wine brands to choose from, you’re going to abandon wine in favor of ready-to-drink cocktails, beer or cheap spirits brands,” Malandrakis said, adding that Gen Z’s use of cannabis has It also reduces the appeal of the wine.

This leaves many farmers with no choice but to leave the industry entirely. A 2022 survey by Riverland Wine found that about a quarter of growers in the region planned to exit within the next three years.

For Townsend, once he’s finished removing the vines, he plans to replant the barren land with native plants.

“The eventual loss of our vines will now bring us tenfold joy as we see native animals and birds return to our land,” he said.

(Except for the headline, this story has not been edited by NDTV staff and is published from a syndicated feed.)