Australian Wine Industry Leaders Urge Federal Government to Intervene in Deepening Sector Crisis

Australian Grape & Wine (AGW), the national body representing the country’s wine sector, has called on the federal government to take urgent action to address what it describes as a deepening crisis in the industry. In its 2026-27 Pre-Budget submission, AGW outlined a $139.25 million, three-year plan aimed at protecting regional communities from growing financial distress and mental health challenges, while also tackling structural oversupply and rebuilding demand for Australian wine.

The submission, titled “Securing the Future of Australia’s Wine Regions: A Targeted Crisis Intervention and Structural Adjustment Plan,” was released as the sector faces mounting pressures from both domestic and international markets. AGW CEO Lee McLean said that the current situation goes beyond a typical market downturn and now represents a structural crisis that cannot be solved by the industry alone.

McLean pointed to collapsing global demand for Australian wine and the ongoing effects of trade disruptions with China as key factors behind the crisis. He warned that without government intervention, the adjustment process would be disorderly, prolonged, and could cause significant harm to regional communities that depend on grape growing and winemaking.

According to AGW, national wine inventories have reached 2.06 billion liters, with 262 million liters more wine in storage than is considered commercially sustainable. This oversupply has led to falling prices and increased financial pressure on growers and producers. The organization emphasized that behind these statistics are real people—growers, winemakers, and their families—who are experiencing levels of stress not seen in generations.

The AGW submission highlighted that if government support is delayed, the consequences will not simply disappear. Instead, they are likely to manifest as business failures, abandoned vineyards, mental health crises, and long-term decline in regional areas.

To address these challenges, AGW proposed a range of targeted measures including business transition support, concessional loan programs for affected businesses, assistance for re-engaging with export markets, domestic tourism stimulus initiatives, and expanded mental health services to strengthen community resilience.

McLean described the plan as an economically responsible and socially humane approach to managing a necessary transition in the sector. He argued that acting now would involve a modest investment compared to the much higher costs of inaction, which would be borne by regional Australians who are least able to absorb them.

AGW stated that its proposed measures align with existing government priorities such as regional development, mental health support, trade diversification, productivity improvement, and the broader “Future Made in Australia” agenda. The organization also noted that there are precedents for government intervention following major external shocks affecting key industries.

The call for government action comes at a time when many rural communities are already under strain from economic uncertainty and changing market conditions. AGW’s submission urges policymakers to recognize the warning signs and work with industry leaders to secure the future of Australia’s wine regions before further damage occurs.