Wine industry at 50 year low

The current conditions in the Australian wine grape industry have been described as the worst for 50 years.

The national wine grape harvest is forecast to be down by up to 20 per cent this year but even then Mark McKenzie from Wine Grape Growers Australia says it will done at a loss.

"Really it's more around the fact that that lower volume coupled with the worst price position for wine grape growers in terms of the wine grape prices they're receiving in real terms which are the worst in living memory, that is what's causing the financial crisis in the wine grape sector at the moment," he said.

That is despite the removal of about eight thousand hectares of vines in the Riverland and Murray Valley.

The situation has been aggravated by a crash in prices over the past two years and an over supply of wine grapes.

"In the major inland regions we're seeing prices as low as a quarter of their cash production costs and approaching those levels in some of the supposedly premium cool districts as well so we are still actively having to come to grips with a significant over supply in the industry," Mr MacKenzie said.

He says the quality of wine grapes is reported to be outstanding in most growing areas but it won't compensate for poor prices and an oversupply of wine.

Australia has an estimated 95 million cases of unsold wine.