Heatwave could stop wine glut

Scorching temperatures across Australia's wine regions mean the predicted glut might never arrive.

Wine grapes are being burnt and damaged on the vine in the New South Wales Riverina, after weeks of temperatures around 40 degrees.

Brian Simpson, from the Wine Grapes Marketing Board at Griffith, says production losses could be as high as 20 per cent.

"We're seeing a slow down in the maturing of grapes. Some of the topes of vines [are] getting burnt off and the edges of leaves crisping up and shrivelling,' he says.

"It's all anecdotal at this stage, but we could be [looking at] anywhere from 10 to 20 per cent reductions."

Meanwhile, Riverina grape growers are frustrated with prices on offer from winemakers this vintage.

Lower grape prices were expected this year, because of the effects of the global credit crisis and the predicted over-supply of fruit.

But Mr Simpson says some of the prices on offer won't even cover the cost of production.

"In our major variety, which is chardonnay, we've seen drops anywhere from 10 per cent decline from last year's prices up to 65 per cent,' he says.

"In some instances, growers are going to be getting paid $200 below the cost of production. It's like giving your income away to someone else so they can make a return."