Wine sectors warns of demand crisis, calling for govt investment

Australian Grape & Wine’s 2026–27 Pre-Budget Submission calls on the Federal Government to implement measures to stabilise Australia’s wine sector and protect regional communities from escalating economic and mental health impacts.

The submission, Securing the Future of Australia’s Wine Regions: A Targeted Crisis Intervention and Structural Adjustment Plan, outlines a $139.25m, three-year package to address structural oversupply, rebuild demand, and support growers and winemakers facing prolonged financial distress.

Australian Grape & Wine Chief Executive, Lee McLean, said the evidence was clear that the sector had moved beyond a normal market cycle and into a structural crisis that required government partnership.

“This is not a short-term downturn, and it is not a problem the industry can solve alone,” McLean said.

“Australia’s wine sector is facing a structural crisis driven by collapsing global demand and the lasting impacts of the China trade disruption. Left unmanaged, the adjustment will be disorderly, prolonged and deeply damaging for regional communities.”

The submission highlights national wine inventories of 2.06 billion litres, with 262 million litres more wine in storage than is commercially sustainable, alongside rising financial distress and mounting pressure on rural mental health services.

“Behind these numbers are people — growers, winemakers and families — under levels of stress we have not seen in generations,” McLean said.

The package proposes targeted, time-limited measures to support orderly transition, remove barriers to recovery and rebuild demand — including business transition support, concessional loans, export reengagement, domestic tourism stimulus and expanded mental health services in affected regions.

McLean said the submission was designed as a preventative investment, not a subsidy.

Image caption: iStock.com/igorr1