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Risk and Economic Impact of Phylloxera in South Australia’S Viticultural Regions

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Risk and Economic Impact of Phylloxera in South Australia’S Viticultural Regions The Risk and Economic Impact of Phylloxera in South Australia’s Viticultural Regions Volume 1, Main Report A report prepared for Prepared by and EconSearch Pty Ltd PO Box 746 Unley BC SA 5061 Tel: 08 8357 9560 Fax: 08 8357 2299 March, 2002 PGIBSA The Risk and Economic Impact of Phylloxera in SA’s Viticultural Regions Contents List of Tables.................................................................................................................. iv List of Figures ................................................................................................................. v Abbreviations ................................................................................................................. vi Acknowledgements........................................................................................................vii Executive Summary ......................................................................................................viii 1. Introduction ..............................................................................................................1 1.1 Background to Study........................................................................................1 1.2 Key Viticultural Regions in South Australia ......................................................2 1.2.1 Description .............................................................................................2 1.2.2 Statistical information.............................................................................4 1.3 Classification of Grape Growing Regions in Australia Based on Phylloxera Status .............................................................................................6 2. Assessment of the Relative Probability of Phylloxera Infestation and Spread in SA’s Viticultural Regions ......................................................................................8 2.1 Factors Considered..........................................................................................8 2.2 Method of Assessment.....................................................................................9 3. Probability of infestation With Phylloxera in SA’s Viticultural Regions (External Factors)...................................................................................................10 3.1 Proximity of Regions to an Interstate PIZ.......................................................10 3.2 Importation of Planting Material into SA.........................................................11 3.3 Importation of Grape Juice or Must into SA Regions from PIZ or PRZ Areas .............................................................................................................12 3.4 Machinery Movements from Interstate into SA Regions ................................13 3.5 Interstate Visitors to Wine Regions ................................................................14 3.6 Other Movements of People from PIZs to Viticultural Regions of SA ............15 3.7 Recent Plantings of Vineyards in SA’s Viticultural Regions ...........................16 3.8 Overall Probability of Phylloxera Infestation in SA’s Viticultural Regions.......16 4. Probability of Spread of Phylloxera in SA’s Viticultural Regions after an Infestation (Internal Factors) ..................................................................................18 4.1 Soil Type ........................................................................................................18 4.2 Vineyard Concentration..................................................................................20 4.3 Vineyards Grafted on Resistant Rootstocks ..................................................22 4.4 Movement of Grapes and Must Between and Within SA’s Viticultural Regions ..........................................................................................................23 4.5 Overall Probability of Spread of Phylloxera in SA’s Viticultural Regions........25 5. Approach to the Economic Impact Analysis...........................................................26 5.1 Impact on Individual Vineyards ......................................................................26 5.2 Impact on Regional Grape and Wine Production...........................................26 5.3 Impact on the Regional Economy ..................................................................27 5.4 Impact on the South Australian Grape and Wine Industry .............................29 5.5 Impact on the South Australian Economy ......................................................29 6. The ‘Representative Vineyard’ Financial Model.....................................................30 6.1 Background ....................................................................................................30 6.2 The Basic Premise of the Model ....................................................................32 6.2.1 The ‘without phylloxera’ scenario.........................................................32 6.2.2 The ‘with phylloxera’ scenario..............................................................32 7. The Impact of a Phylloxera Outbreak on Individual Vineyards ..............................40 EconSearch Pty Ltd Page: ii PGIBSA The Risk and Economic Impact of Phylloxera in SA’s Viticultural Regions 7.1 Group Variation in Vineyard-Level Results ....................................................41 7.2 Regional Variation in Vineyard-Level Results ................................................42 8. The Impact of a Phylloxera Outbreak on the Regional Grape and Wine Industry and the Broader Regional Economy ........................................................44 8.1 Background and Assumptions .......................................................................44 8.1.1 The number of growers quarantined by a hypothetical PIZ .................45 8.1.2 The number of growers in the PIZ with phylloxera-infested vineyards by 2010................................................................................45 8.2 The Impact of a Phylloxera Outbreak on Regional Grape Production ...........50 8.3 The Results of the Economic Impact Analysis at the Regional Level ............52 9. The Impact of a Phylloxera Outbreak on the South Australian Grape and Wine Industry and South Australian Economy.......................................................55 10. The Risk of Phylloxera in South Australia’s Viticultural Regions............................57 10.1 Vineyard Level Risk of Phylloxera..................................................................57 10.2 Regional Level Risk of Phylloxera..................................................................58 11. Conclusions and Recommendations......................................................................60 12. References.............................................................................................................62 Appendix 1 Tender Specifications ..........................................................................64 Appendix 2 Input-Output Methodology....................................................................65 Appendix 3 Glossary of Input-Output Terminology .................................................68 EconSearch Pty Ltd Page: iii PGIBSA The Risk and Economic Impact of Phylloxera in SA’s Viticultural Regions List of Tables Table 1.1 Key Viticultural Regions of South Australia .................................................2 Table 1.2 Number of Growers and Property Size by Viticultural Region in SA ...........4 Table 1.3 2001 Vintage, Source of Fruit by Viticultural Region in SA .........................5 Table 1.4 2001 Crush Compared with 2006 Estimated Demand – By Viticultural Region in SA................................................................................................5 Table 3.1 Probability of Phylloxera Infestation in a Region due to Proximity to a PIZ in Other States ....................................................................................11 Table 3.2 Importation of Planting Material into SA Viticultural Regions from Interstate between 1998 and 2001 ............................................................12 Table 3.3 Volume of Juice and Must Moved from PIZ and PRZ Regions into Regions under ICA Protocols ....................................................................13 Table 3.4 The Probability of Phylloxera Infestation by Vineyard Machinery in SA’s Viticultural Regions ...........................................................................14 Table 3.5 Movements of Vineyard Equipment from Interstate and Within Regions .....................................................................................................14 Table 3.6 Main Points of Entry into South Australia ..................................................14 Table 3.7 Number of Interstate Visitors to Cellar Doors Outlets in Wine Regions of South Australia, 1999 ............................................................................15 Table 3.8 Total Vineyard Area by Viticultural Region in 2000 and Increase Since 1997.................................................................................................16 Table 3.9 Factors Affecting the Overall Relative Probability of a Phylloxera Infestation in SA’s Viticultural Regions ......................................................17 Table 4.1 Surface Soil Texture in SA’s Key Viticultural Regions...............................20 Table 4.2 Concentration of Vineyards in Selected Areas of GI where Vineyards are Mainly Located ....................................................................................22
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