The China tariff on Australian wine came off in March 2024. Australian wine exports to China passed $1 billion in 2024-25, per Wine Australia’s export data. The recovery was real, and for premium South Australian producers the recovery has been the dominant fact of the last two vintages.
For the warm-inland growers, the recovery has barely arrived.
The two-tier reality
Wine Australia’s National Vintage Report 2025 recorded the 2025 crush at around 1.4 million tonnes, below the long-term average. Inventory-to-sales ratios for red wine remained elevated after the 2021-23 glut. The wine that is moving is concentrated at the premium end.
In the Riverland, shiraz and cabernet prices at vintage 2025 remained below $300 per tonne, widely reported by Riverland Wine (under chief executive Lyndall Rowe) and ABC Rural to be below the cost of production. That is not new; it has been substantially true since 2023. The new thing is that the premium-end recovery has not flowed through to the warm-inland floor price, as many observers had expected it would.
Accolade Wines, under Australian Wine Holdco (the Bain Capital-led consortium that took ownership in 2023), has continued to restructure through 2025 with the AFR and other outlets covering the reduced contracted grape intake. That reduction hits warm-inland growers disproportionately because the warm-inland fruit had been the main source of Accolade’s bulk-wine programme.
The WET rebate has not moved
The Wine Equalisation Tax rebate cap has remained at $350,000 since 2018. Australian Grape & Wine (chief executive Lee McLean) argued through 2025 for indexation and for a grower-assistance package aimed at the warm-inland regions.
The rebate is a meaningful line on the P&L of a small producer. It has lost roughly 25 per cent of its real value since 2018 in CPI terms. A policy that is nominally unchanged has, through inaction, contracted.
Another year of below-cost prices, another year of unchanged rebate. We are not going broke because of one year. We are going broke because nobody above us has moved in eight.
The climate layer
The 2024 frost and the 2025 heat spikes added a second pressure: vintage variability. Limestone Coast and Coonawarra producers reported disruptive weather events in 2024 and 2025 that materially affected yield and quality, per Wine Australia’s regional snapshots.
Large producers absorb those events across a portfolio of regions and vintages. Small producers do not. A single-region, single-vintage producer with a bad frost in 2024 and a bad heat spike in 2025 has a two-vintage problem that the balance sheet may not survive, even if the 2026 vintage is perfect.
What the survivors look like
The small producers I have spoken with who are still operating have, broadly, done one of three things.
- Moved up the quality ladder and out of bulk. Growers who contracted directly with premium producers, or who established their own premium label, are seeing 2025-26 pricing that is consistent with the broader premium recovery.
- Consolidated with a neighbour. Multi-family or multi-owner arrangements have spread fixed cost over more hectares, particularly in the Riverland, where the economics at the grower level no longer work at single-family scale.
- Diversified the land use. Table grapes, citrus, almonds and in some cases solar installations have supplemented or replaced grape revenue on the warmer parts of the Riverland.
Each of these is a real adaptation. None of them is what a grower wanted to do with the land they bought in 2012 to grow wine grapes.
The policy window
Wine Australia’s 2025 advocacy work, the ASBFEO’s commentary through 2025, and Australian Grape & Wine’s submissions all point in the same direction: the warm-inland grape sector needs either structural reduction in planted area, or material uplift in the WET rebate, or both. The 2026 federal budget is one of the potential windows for a response.
The politics of that response are complicated. A direct grower-assistance package triggers subsidy debates. A rebate lift has implicit revenue cost. A structural adjustment package requires cooperation from large producers whose contracted intake is the pressure point.
There is no 2026 outcome that is straightforward. But the outcomes of continuing inaction are now visible in the grower-level cash-flow data: below-cost prices, unserviceable debt, and family farms that are entering their third year of being unable to make the numbers work.
The wine Australia exports to China in 2026 will not, on current trends, be warm-inland fruit. That is an adjustment the industry will have to reckon with, one way or another. The only question is how much of the warm-inland grower base remains by the time the reckoning is complete.