Wine glut means farmers must watch grapes wither on the vine

Australia's booming wine industry has become a victim of its own success, with so many new vineyards that the country now has a chronic oversupply of grapes.

Growers in some of the country's most famous wine regions, including the Hunter Valley, Margaret River and the Barossa Valley, are facing the miserable prospect of watching their grapes wither on the vine because of a lack of buyers.

The popularity of Australian wine overseas encouraged the planting of hundreds of new vineyards from the late 1990s, with most growers opting for red grape varieties such as shiraz and cabernet sauvignon. Those vineyards are now starting to produce wine.

Further encouragement was given by the government, which offered generous tax breaks to develop the industry. Two years ago it was reported that a new vineyard was opening every 36 hours. Australia now has 150,000 hectares of vineyards, a threefold increase compared with a decade ago.

The problem has been made worse by plentiful harvests in 2002 and 2004 and predictions of another bumper crop this year.

'It really hurts,' said Peter Lidgerwood, surveying the ripened bunches of grapes on his vineyard in Loxton, South Australia. 'It means the last 12 months have been a total waste of time.'

Despite phoning every wine company he could think of, Mr Lidgerwood, 55, could not find a buyer. His entire crop of more than 150 tonnes of grapes, which he had hoped would fetch A$100,000 ($610,000), will now be left to rot on the vine.