Accolade Wines has announced a buyout package for Riverland grape growers that aims to address the Australian grape glut.

Last year Rabobank reported Australia’s oversupply had reached two billion litres of wine or over 2.8 billion bottles of wine. That’s the equivalent of 859 Olympic swimming pools worth of wine in storage due to the glut.

In regions such as Griffith, grape prices fell to an average of $304 ($200) a ton last year, the lowest in decades and down from $659 in 2020, according to data from Wine Australia.

Riverland wine growers called for a moratorium last month on planting vines in a bid to solve the crisis, with experts predicting millions of vines will need to be destroyed.

Accolade said it was actively working with the local grape growing cooperative CCW – which has 540 members – to develop a package to address the oversupply issue currently facing the wine industry. The package is being introduced to grower members of CCW through a series of meetings this week.

Under the current terms of its contract, the CCW must “sell to Accolade all grapes supplied to CCW by its members under existing contracts’’ and Accolade has to buy all of those grapes.

The new offer, if accepted, would mean it only has to buy around 80% of the current volume, or around 150,000 tonnes of grapes.

A new 10-year proposal will see Accolade buy-out CCW red wine contracts for $4000 per hectare. Prior to the grape glut growers could make up to $8000 a hectare, depending on the grape variety.

Accolade is also offering to buy out a separate bulk wine contract the CCW has in place for export to the China market, with that part of the proposal worth $11 per tonne.

Accolade Wines CEO Robert Foye told the Australian Financial Review there was a significant structural mismatch between supply and demand in the wine industry, and it needed to be fixed.

“As an industry, for us to continue as if no response is required simply isn’t sustainable,” Foye said.

Riverland Wine group organised an assembly of 900 growers in February, with attendees calling for immediate relief and also for the government to “facilitate a transition out of an industry” that had become “unsustainable”.

CCW members will vote on the Accolade offer at a meeting next month.

Traditionally, CCW supplied grapes for Accolade’s cheaper commercial wine brands, such as such as Banrock Station, Berri Estate and Hardys. The company is seeking to put more focus on its premium brands, such as Petaluma, Grant Burge and St Hallett.

Accolade chief supply chain officer Joe Russo told The Australian that “as an industry, for us to continue as if no response is required simply isn’t sustainable. We have a shared responsibility to face into this challenge”.

“We’re wanting to take a constructive approach to the biggest industry challenge in many years,” he said. “We’re working closely with CCW and have listened and adapted in developing this package.”

Accolade said that in addition to developing this package, the company was proactively engaging with government and the broader industry to lobby for support for the sector as a whole as the industry transitioned to a more sustainable footing.

“These are not easy issues, but it is our responsibility as a business – and as an industry – to face them head on and respond, for the good of the sector,” the company said.

Full details of the package will soon be available here: sustainableriverlandwine.com.au.