BALNAVES, Mr Peter, Director and Owner, Balnaves of Coonawarra RAYNER, Mrs Kate, Finance Manager, Patrick of Coonawarra STRICKLAND, Ms Helen, President, Limestone Coast Grape and Wine Council TOCACIU, Mr Luke, Owner, Patrick of Coonawarra [11:37] ACTING CHAIR: Welcome. Although the committee does not require you to give evidence under oath, I should advise that this hearing is a legal proceeding of the parliament and therefore has the same standing as proceedings of the respective houses. The giving of false or misleading evidence is a serious matter and may be regarded as a contempt of parliament. The evidence given today will be recorded by Hansard and attracts parliamentary privilege. I now invite witnesses to make a brief opening statement, and then we'll proceed to questions. Mr Tocaciu : I'm a second-generation owner and winemaker and represent family owned small- and medium-enterprise wine producers in the Coonawarra wine region. We appreciate the committee undertaking this inquiry, as it provides important opportunity for us to share our lived experience and practical insight as business owners. It couldn't come at a better time for the wine industry, as the current economic conditions, declining visitor numbers and increasing expenses are significantly impacting our vineyards, wine producers and associated tourism businesses in our region. According to the South Australian Tourism Commission, the Limestone Coast visitor economy contributes approximately $662 million annually to the economy and supports about 2,100 jobs. Coonawarra is in the heart of the Limestone Coast and is internationally recognised as one of Australia's premier wine regions, yet, despite our global reputation, many wine and tourism businesses are facing some increasing economic pressure. Independent data from SpendMap, which tracks credit card and bank transaction spend in the region, has demonstrated a concerning decline in visitor expenditure in the Penola and Coonawarra area. Between 2022 and 2026, average weekly visitor spending has declined across entertainment, travel, food retailing and alcohol categories. This trend affects business confidence and investment decisions, employment opportunities and long-term sustainability. But our purpose today is not to outline the challenges; our purpose is to share our regional business experience, highlight some opportunities for sustainable economic growth and reinforce the importance of Australia's wine regions in the tourism and export economies. The outcome of this meeting also gives you the opportunity to make a real difference in our industry and community. I'll hand over to Helen to speak from the Limestone Coast Grape and Wine Council. Ms Strickland : In putting forward members input over the last year and a half as we have been challenged, as Luke has said, in terms of the wine industry. Limestone Coast is one of Australia's premier wine regions. It spans South Australia's south-east from the coast to the Victorian border. It comprises six distinct regions—Coonawarra, Padthaway, Wrattonbully, Mount Benson, Robe and Mount Gambier—as well as the broader Limestone Coast wine zone 'other', which includes areas such as Bordertown and Lucindale. Obviously, there are some bigger regions in there and some tiny ones, but we work together for the good of the whole region. Together, these regions form a large, diverse premium wine zone of around 21,000 hectares of vineyards, producing globally recognised cool-climate wine. That hectare figure is a shifting thing at the moment as people look at whether their enterprise is viable and whether they shift to other enterprises. Here are some key points that members would like to put forward in terms of protecting Australia's clean and green brand. Australia's premium agricultural reputation is a national economic asset, but currently we believe it is underprotected. We need clear, enforceable national standards for sustainability and provenance. Our export marketing must be credible, consistent and evidence based, and land-use decisions around who farms what on the land must be consistent and must consider the impact on agricultural reputation and exports. In particular for our region here, I'm thinking of mining, energy use and water. Water is the pivotal issue for our region. We have an underground aquifer. It must be protected. It must be used sustainably so that not only do we have the benefits of it but so do our children and our grandchildren. These are big issues for our region in terms of that clean and green status. We need to back regional small and medium enterprises to compete and to export. Regional small businesses produce high-value products but face some structural barriers. Too many are locked out of export markets due to cost, complexity and risk. As to small players just looking at getting into the export market, one person spoke with me the other week who said you've got to spend two years to get a return, which means you are spending a lot of money with no comeback for that period of time. Current support, our members believe, is not working. We need to reduce export costs and risks, strengthen supply chain protections and expand practical, hands-on export support. And I know that these guys are going to talk about that a bit more, so I won't. We need to fix the data gap and get the National Vineyard Register up. We've been working on that since 2024. It's due for implementation, or the start of implementation, in 2027. The point we are making is you cannot manage supply or policy settings without accurate, real-time data. South Australia does have that to some extent; it's not available nationally—to actually know what's out there, who's growing what, how many hectares and what it's worth. A national vineyard register is a priority, we believe, to improve market transparency, investment confidence and evidence based policy decisions. My next point is that we need to deliver practical structural-adjustment support, which is a nice way of saying that there is a lot of pain out there at the moment, in, I think, pretty much every region in Australia, and the Limestone Coast is not separate from that. Parts of the industry are facing oversupply. Falling profitability—I'd say that's across the board. Without action, we're seeing vineyard removal, business exits and regional decline. Our members believe that we need direct grants for transition and vine removal. It's a complicated thing to get out of a vineyard. You've got some things that need to be handled sensitively in terms of the land itself and not harming that. You've got to get rid of posts and wires and plastics; vines are probably the easy bit to get rid of! It's quite an expensive proposition. We need support for land-use change and infrastructure adjustment, and it must be planned and supported, not left to a crisis. The next point—I've only got a couple of others—is strengthen regional branding and premium positioning. Australia must continue shifting from volume to value. Regional brands like the Limestone Coast are globally recognised, particularly Coonawarra, but, I believe, underleveraged. We should promote regional identity and provenance and align labelling and certification to build trust and price premiums. In line with what we heard in input to the last standing committee, we need better integration of tourism with trade and exports. Tourism and agriculture are not connected strongly enough at a national level. Visitors are future customers. We should treat them that way. Key actions include a national food, wine and tourism strategy; investment in regional tourism infrastructure—accommodation, roads; visibility of knowing where things are; and programs to convert visitors into ongoing export demand. The other things are around making sure that there is a coordinated national approach to this structural adjustment that we're going through. Investment in biosecurity is completely important where we are. I live eight kays from the Victorian border. If someone comes in to harvest grapes on my place, they are likely to have been in Victoria. So it's about understanding what diseases are out there, what could come in and how you fund ongoing understanding of biosecurity. To close, regional Australia has a strong global demand for premium products, but without coordinated action structural barriers will limit growth. ACTING CHAIR: Thank you. Mr Balnaves. Mr Balnaves : To give you a bit of context to the comments that I'm going to make, Balnaves of Coonawarra is a family owned wine business located in the Coonawarra wine region. It's been associated with the district since 1855, and we first started producing wines in 1990. The business encompasses vineyard management, wine production, grape sales, bulk wine sales, cellar-door tourism, domestic and international wine sales, and viticultural services to other growers throughout the region. Balnaves exports to markets including Papua New Guinea, South Korea and the United Kingdom and supports permanent and seasonal employment across viticulture, winemaking, tourism, administration, logistics and contracting services. During peak periods, the business employs up to 30 people directly while generating economic activity through its relationships with local suppliers, transport operators, accommodation providers and tourism businesses throughout the Limestone Coast. To answer your previous question, finding employees is very difficult at all levels across those services. Wine tourism is a key driver for visitation to the Limestone Coast, generating expenditure across accommodation, hospitality and retail businesses and helping sustain regional jobs and investment. Like many businesses across the wine sector, Balnaves have been significantly impacted by the current industry downturn. Global supply, declining wine consumption, reducing demand for grapes, rising input costs and ongoing market uncertainty have placed considerable pressure on wine businesses, grape growers and regional communities. Despite these challenges, Balnaves have remained committed to sustainable business practices and continuous improvement across environmental, social and governance outcomes. My part in this submission is to talk about sustainability and investment confidence. My background has been in water politics, and this encapsulates many things, both technical and social licence based. To highlight the importance of a clean, green image, I've given you a copy of our sustainable document, which we've produced as a business. It's our document, but it's not uncommon to see that right across wine and grape businesses across Australia. The Limestone Coast Coonawarra wine industry in South Australia, along with many other agricultural businesses, benefits from the clean, green image that has taken generations to generate and millions of dollars to sustain. The broader wine industry does this through Sustainable Winegrowing Australia, which is a trust mark for sustainability. Many other companies do additional work to further their own business objectives. On the social licence of the clean, green image, as you would be aware, the wine industry is a forward-facing industry—that is, we have customers just over the counter. The customers, both within Australia and in all parts of the world through export markets, are now, more than ever, asking where the grapes are grown, how the grapes are grown, how the wine is made and how we, as the producer, have undertaken to make these wines sustainably. This has been enabled through the advent of smartphones, social media and the like, and it's changed the way in which many other industries and private production operate. The gatekeepers of influence can change quickly—for the good and for the bad. Through QR codes and other technologies, the consumer can now see your vineyard and your winery and many other aspects that they feel they need to understand in purchasing your product. This also shows to us the importance of bricks and mortar. Visitation to your cellar door is a physical act of contact and one from which, in most cases, if you can provide a good experience, you will have engaged the customer for life. It highlights the need to bring customers, both domestic and international, to the region, because generally, as you would have done in your own holidays, you become an advocate for a country town or a business that you've been to. In summary, the social licence behind the clean, green image has never been more important. Development of industries such as unconventional gas extraction, fracking or strip mining next to or within premium food and wine producing regions has the ability to have significant detrimental effects on long-term business and investment confidence. This is actually happening now, north of Coonawarra, where strip mining for rare earths is happening. Recent discussions with the South Australian government about lifting the moratorium on unconventional gas extraction in the region have been heard in United Kingdom export markets. That's not to say that we should never do anything; it just highlights how the information transfers and the speed at which it's happening. We feel that an integrated approach to both state and federal government through a proposed agricultural commissioner, which would deal with how and where industries interact and focus on maintaining and enhancing Australia's clean, green image, should move to the forefront. It's a point of difference that Australia has and it can continue to be capitalised upon. ACTING CHAIR: Thank you very much. I'll start off with a question to Ms Strickland. A couple of your points were about structural adjustment of the wine producing sector. What percentage of vines would need to be pulled to bring supply and demand back into balance? Ms Strickland : That's one of those 'how long is a piece of string' questions, and there are various answers to that. It might be that it's less about what percentage needs to leave and more about what types of grapes and which regions need to look at some adjustments. I think it will be across the board, but I believe that it would be sad to see the premium regions that are doing a little better also pull out a lot of vines. There are figures of around 30 per cent kicked around. You guys would also have those kinds of figures. Mr Balnaves : Yes. The reality is that consumption of alcohol worldwide has dropped by 30 per cent over the last few years. The demand is still there; it's just that the demand for the style of wines that are being made and where they come from has changed. There needs to be an adjustment as soon as possible, and it'll adjust what the market demands fairly quickly, I think. ACTING CHAIR: So where are the opportunities? As you mention, Coonawarra, in particular, is recognised as a premium wine producing area. Is there potential to expand markets for premium wines? I know that bulk wines are struggling in places like China and the US, where demand seems to be dropping off, but is it across the board, or is there a separate opportunity for premium wines from this region? Mr Tocaciu : Yes, there definitely is a chance for premiumisation—of wine, especially. We in Coonawarra, certainly, have seen that opportunity. Volumes have come back, and value continues to grow, and there is more opportunity for us, as a small business, to chase that high-value end product—whether that's selling less but more expensive wine. There is a limited market within Australia for that, so you're obviously playing in a lot more markets to try and tap into that high-end demand. Certainly, that is where the opportunity is for us going forward, if we can get through some of the challenges of oversupply in the short term. ACTING CHAIR: I addressed this question to the previous panel, but it is, really, more appropriate to you. With wine tourism, what is the best value for your businesses? Is it the cellar door sales? Is it building that brand recognition for people so that, when they go back to Sydney or Melbourne, they buy your wine off the shelf? What are you really trying to achieve with your cellar-door-type activities? Mr Balnaves : I think the cellar door is the most profitable place to sell wine. You've got no distributors and no wholesalers between you and who you are selling to. That key point of contact—ingratiating yourself with people in our premises and dealing with them is a really key part of what we do, because people talk. People talk to their friends about coming to a region or going to a cellar door or, potentially, going to a restaurant or staying in accommodation. Regional tourism and the ability to try and increase that is a key point, as was spoken about in the last submission. It's a very important thing and probably not difficult to do. It's just how it's best harnessed. Ms Strickland : What I see increasingly with our very small cellar door is that people want experiences. They're very chuffed if they're talking to the winemaker, or if they get to sample something out of a barrel. We do a walk to our waterhole, which people love, or a walk around the garden. It is about tasting wines, but it's more than that. It's: do you have a decent platter of food to go with that? Can you talk with me about the difference between pinot noir, pinot gris and pinot grigio? Why have they all got the same pinot when they're all different? As Pete said, it's about developing a relationship rather than just going: 'There are three wines. Taste them. Which one are you going to buy?' ACTING CHAIR: With the tourism picture, are you seeing tour groups coming, like a bus load of international tourists or Australian tourists? Is it driving local people that have driven up from Melbourne or down from Adelaide? What is the sort of tourist market that you're dealing with? Ms Strickland : It's different everywhere. There are some bus loads wandering around. There are people who we see that meet in Mount Gambier because it's halfway between Melbourne and Adelaide, and they're coming from different points of view. But I would think it would be different in the Coonawarra as well and then different at Mount Benson, and places like Wrattonbully that have very limited cellar doors would be different again. Mr Tocaciu : Our main visitation is domestic. Melbourne, Victoria and Adelaide are our two regions that we get the most visitors from. We don't get a lot of tour groups being so regional where we are. We're getting more car loads of people coming over for multiple-night stays. Increasingly, we've seen that they're coming to Coonawarra but they're also spending a day at Robe at the coast or a day in Mount Gambier. Their extending their trip to that multi-day visit and stay. We have seen a significant drop-off in international tourism where they don't necessarily buy our wine from our cellar door but they do go back with that memory of Coonawarra and take that for the rest of their lives. ACTING CHAIR: Ms Briskey? Ms BRISKEY: Thanks for your contributions today. I wanted to expand a little bit more on the sustainability evidence that you've been providing. In terms of our existing sustainability measures, how does Australian wine compare internationally? Mr Balnaves : It compares very well. We've got a reputation internationally of a clean, green image, and that's certainly been enhanced by Sustainable Winegrowing Australia, which is a national Wine Australia initiative that basically certifies growers and producers to a standard that's world recognised by buyers. We've got an advantage that we need to continue to hold onto. Other countries probably can't. If you've got nuclear reactors or other things going, it's very hard to change the narrative about that. That's where whatever we do has got to be well considered going forward. Ms BRISKEY: In terms of the sustainability certifications, what difference does achieving a certification make? Mr Balnaves : In the end, it's going to become a barrier to trade. If you're not a certificate holder of Sustainable Winegrowing Australia, you will not be able to sell fruit domestically and therefore internationally. That's on the edge of happening now. Most people that buy bulk wine or wine internationally will require that certification. Australia's a long way advanced in getting the entire industry, regardless of state, into the right circumstance, but we need to continue to push that because consumers just want more and more information. Ms BRISKEY: Thank you. ACTING CHAIR: Senator Cox. Senator COX: Ms Strickland, during your opening statement you mentioned some clearer national standards. Are they already written? Are you able to table them for the committee? Is that something you're able to talk to for us? Ms Strickland : I missed a bit of that; my apologies. Senator COX: National standards—I wrote down 'clearer national standards'—for wine producers: I'm keen to understand whether that's something that you've produced or that is in train, or if it's something that we could look into further. Ms Strickland : I think it fits in with what Peter was saying in terms of certification that is required—it's not required at the moment but increasingly will be. One of the barriers to getting that across the board is the amount of work and money required to make that happen. Certainly, having something like that is important into the future. And, increasingly, as you said, it will be a barrier if you don't have it. Senator COX: In your submission, you noted that some small and medium wine producers are experiencing that growth disconnect with national trade and export support frameworks. You mentioned in particular cost complexity and risk around some of those very critical things for export markets. I'm keen to understand what that looks like from the point of view of the realities of operating a regional business. The previous panel told us a little bit about regional airports and planning and things like that. Is that also true for the wine producers in this region? Also, what are the additional supports that you might think about or that this committee could consider? Ms Strickland : I can start on this, but these two guys can probably add more context to that. My understanding is that we're a long way from anywhere. That's the start. If you want to export, the costs involved in actually setting up that supply chain and getting into that market are quite considerable, and then your return on that investment in terms of personnel and in terms of dollars as well, which is not insignificant, will take you some years to get back. That's the risk factor in that. One of the things that I noted when we were talking yesterday was that idea of, instead of us going somewhere for a trade fair or whatever, why don't we bring the buyers back in here? Why don't we support that so they can come into the regions and meet us on our own ground? That would be a really good, practical way to do something so that you actually had trade people coming into the region. The other witnesses might have more to add on that. Mr Tocaciu : Yes. We really acknowledge the help that Austrade and Wine Australia give us and also the Department of State Development in South Australia. We hosted a group of 12 Chinese international buyers recently. They came down to Coonawarra, spent the night, had a tomahawk steak from Mayura Station at our cellar door, and went away being absolute ambassadors for Coonawarra and the region. Certainly, support in bringing people to region, not only international buyers but also domestic buyers, flowing right through to influencing the consumers to come and visit a region would be—a lot of assistance is needed in that area, and barriers like transport are one hurdle to get to region. ACTING CHAIR: I might have missed it, but who supported that program? Was it the South Australian government or Austrade, with the federal government? Mr Tocaciu : South Australia—the Department of State Development. Mr GEORGANAS: I might ask you the same question I asked the previous group. That was on the issues with shortages of work skills, filling positions et cetera. Can you give us an overview of the wine industry and where the shortages of skills are in the region. Is the industry struggling, or are you doing OK compared to other industries when it comes to finding labour? Mr Balnaves : I think, in most of the discussions we have across multiple industries—and the wine industry is no different—there's a capacity loss through lack of employees, be that in administration, cleaning, tractor drivers and winery staff. There's a real lack of availability of being able to get the right people—in fact, sometimes any people—to come in and do the jobs. There are, I think, a few businesses that we deal with which would all say the same thing, because we discuss a lot about how this is going to be dealt with. There's not a clear way out of that. I suspect that the people that—these are my thoughts alone—we've lost that would have normally filled those roles have probably gone into the NDIS as carers or assistants to that program because populations are increasing in regional areas. But there's just a layer of people—admittedly, businesses have become more complex, so the need to have more staff is warranted. But it's like there's a generation missing. I hope that the solution, in some ways, in what we do in agriculture, is in automation. But the tricky thing there is that rather than having three people, you need one person that is extremely skilled in dealing with electronics and technology. The cost is probably not going to be any different, but maybe that might be a way of us dealing with it in the future. Ms Strickland : To add on to that, I think, because the wine industry has, for some time, had a casualised workforce where you have peak times that you need a lot of people and other times that you don't, it's not necessarily seen as an attractive industry to go into. We need to do some work in terms of making it a desirable industry to go into. This is not just in terms of the jobs in the vineyard or the jobs in the winery that are not high-skill level, but it's also in terms of saying, 'There's a pathway here.' That's rather than saying, 'You're stuck in that job forever.' To be honest, there are a lot of people who actually love that, and they enjoy that. They enjoy working and doing what they're doing. But I believe that young people are increasingly saying, 'Where's this going? What's that going to lead to for me?' and, therefore, they say, 'Why should I commit to it?' I think we are trying to be employers of choice in a market that's contestable. That makes it difficult for us in terms of getting the right people to do the right work. ACTING CHAIR: You mentioned the seasonal nature of the work. Do you access any of the federal schemes such as the Pacific Australia Labour Mobility scheme, the PALM scheme? I suspect it's probably more likely that you use backpackers, particularly those who are trying to get their 88 days regional and get their second-year visa. Is that a solution for you? Mr Tocaciu : Certainly, the backpacker is the ideal scenario for our seasonal work where you're busy from February to April or May—that short window. We see a lot of backpackers come through. For a lot of the labour force in the region, we are reliant on migrant workers for that, for which there is a good supply. Housing, again, as I spoke about previously, is always a challenge. But, the more we move away from the labour and the hand work that needs to be done and more into automation and machinery—it is in balance in that end. But, certainly, getting skilled labour is a challenge. Mr Balnaves : One barrier we have got is also the definition of skilled labour. Tractor drivers and machinery operators are not seen as a skill that's allowed to come in under some visas. That poses some difficulties because there are a lot of people out there in other countries that are willing to come, but they can't come in under that visa system. So that definition perhaps should be looked at and relaxed to some degree in the future. ACTING CHAIR: Well, there is a solution to that. Charlotte and the Limestone Coast group might look at a defined area migration scheme, which we've got in parts of WA, whereby farm workers, tractor drivers et cetera are deemed to be in short supply in that particular region, and they can then come in under the skilled migration program. Are there any final questions from the panel? Mr GEORGANAS: I have one final question. There has been a lot of talk about the EU trade agreement that's been signed recently, and that'll be coming into fruition over the next short period. Is there any positioning by the wine industry? Obviously, we're hearing there will be enormous opportunities. Can you share your views, whether they're positive or negative? Mr Balnaves : Let's hope that there are some big opportunities there. It's a little bit unknown as to how that's all going to play out. It's seen as a positive, but how it actually plays out will take a bit of time to work through. It's been a good initiative. Mr GEORGANAS: But is there any work being done collaboratively with the industry or with anyone else to see where the markets are? Mr Balnaves : Wine Australia would be dealing with that. We don't deal with those sorts of things at a regional level, but Wine Australia, I'm pretty sure, would be dealing with those sorts of market development, Austrade-type issues. ACTING CHAIR: Are there any final comments or observations that you would like to get on the record before we wrap up? Mr Balnaves : Thank you for your time. ACTING CHAIR: Thank you for your attendance here today. If you have been asked to provide any additional information, would you please forward it to the secretariat by Friday 10 July 2026? Please be aware that any questions on notice will be published on the committee's website. You will be sent a copy of the transcript of your evidence and will have the opportunity to request corrections to transcription errors. Thank you very much. Proceedings suspended from 12:17 to 12:48 .