After a difficult decade wine grape growers in South Australia are exiting the industry, and wine experts expect that the falling Australian dollar will result in an influx of investment from foreign investors looking to acquire agricultural land.

 

“There are a lot of wine industry assets for sale, a lot more probably informally, than formally,” said winemaker and lawyer with Findlaysons, Will Taylor.

 

Although more stringent austerity measures in China have cooled foreign investment interest from that quarter, activity has picked up once again in recent months, with Chinese buyers interested in Australia’s vineyards, and aquaculture ventures, according to Tim Altschwager, a real estate expert with Colliers International.

 

Australia’s wine grape sector still has a serious oversupply problem, but sentiment among growers is slowly beginning to lift.

 

"The worst part about the oversupply is we still have the wrong grapes being grown in the wrong places at the wrong cost basis,” says Will Taylor. "So C-grade grapes, for example, being grown at A and B-grade cost basis, which doesn't make economic sense.”

 

Currently the U.S. is the leading source of foreign investment in Australia’s wine sector, and increased interest from American investors is expected to continue.  China’s recent devaluation of its currency has lessened Australia’s advantage against Chinese buyers versus American buyers, as the Australian dollar has remained basically aligned with the U.S. dollar.