Sunday Mail

Tenants fighting landlord demands

Wine exports Hundreds of millions of dollars in the country to China have hit a brick wall after SA wine introduced crippling tariffs. But are producers, reeling from the impact, fighting back, reports Michelle Etheridge

- REBECCA DIGIROLAMO

THE growing cost of renting is contributi­ng to record numbers of tenancy disputes, fuelling concerns about a rise in unreasonab­le demands by landlords.

Realtors, property managers and tenant advocates say unlawful demands have included bans on gay or bisexual sex and not allowing any guests on properties.

Ouwens Casserly director of property management Adam Blight said tenants negotiatin­g leases were more vulnerable to unfair landlord demands in the current, highly competitiv­e market.

He warned tenants to know their rights and, where possible, rent through a reputable agent who is a member of the Real Estate Institute of SA.

New Legal Services Commission data shows 2687 South Australian­s sought legal aid for disputes over rentals in 2020.

That was up 42 per cent compared to 2017 and up slightly from the record-breaking tally of 2666 calls in 2019.

Demand is at its highest level in decades, pushing up rents by 10 to 20 per cent.

“It appears the increasing cost of housing and rental accommodat­ion in SA is contributi­ng to rising numbers of disputes between landlords and tenants,” the commission’s manager of access services, Chris Boundy, said.

He said a significan­t number of disputes involved people forced out of private rentals because their lease had not been renewed, and from students unaware of their rights and obligation­s.

“In some cases, tenants from overseas are being taken advantage of by landlords,” he said.

The Commission could not provide specific details of complaints.

Tenancy advisory service Rentright SA, run by not-forprofit group SYC, said unfair rent increases was one of the top complaints so far this year among record calls for help.

SYC head of home and housing Kirsten Sandstrom said: “Tenants are in a really tight spot right now because they will say yes to higher rent and give up things like medication and food to absorb that added cost, just to keep a roof over their heads, because they know finding another rental property in the current market is very, very hard.”

Ms Sandstrom said Rentright’s average daily call rate was up from 28.5 calls a day in January and February 2019 to about 39 calls a day over the same period this year.

A case involving a landlord imposing a significan­t rent increase is expected to be heard in the SA Civil and Administra­tive Tribunal. By law, rises must not be “excessive”.

Consumer Affairs does not deal with many complaints about unreasonab­le landlord demands, but the few in recent years included tenants being forced to do maintenanc­e jobs.

Landlords Associatio­n SA president Margaret Kohlhagen said rents had risen, but not excessivel­y, and were partly a result of land tax hikes.

MCLAREN VALE

MCLAREN Vale must find another home for $42m worth of bottled wine usually destined for China.

Jennifer Lynch, who manages the region’s wine and tourism associatio­n, says no other single market could replace China’s once-thriving demand.

Hit by tariffs of up to 212 per cent, winemakers are focusing on increasing sales on the domestic front and other global markets.

The introducti­on of tariffs in November saw exports to China drop by 36 per cent to $27m. Chinese consumers have a thirst for quality Australian wine, the bulk of which – until that point – came from South Australia.

“So many of our export markets are in a state of flux that we’re yet to fully understand how the distributi­on and export mix will change,” Ms Lynch said.

Gemtree Wines managing director Mike Brown said China had accounted for about 20 per cent of the comchina pany’s business. Mr Brown said he had now directed more energy into direct-to-consumer sales, along with expanding partnershi­ps in the UK.

“There’s also new opportunit­ies out there, without a doubt. Korea is an example and Taiwan,” Mr Brown said.

In a cautionary warning, Mr Brown expects the full impacts of the tariffs will be felt further down the track.

“Potentiall­y, we’re going to see a shrinking of producers and quantity of wine being made,” he said.

“If we haven’t found a replacemen­t market at the end of 12 months and going into the next 24 months, then I think you’re going to see more pain in the industry.

“Probably the grower is going to be the person that’s hit the most. They’re at the end of the food chain and they’ll be the first people that businesses let go.”

CLARE VALLEY

Taylors Wines managing director Mitchell Taylor says had accounted for up to 15 per cent of the Clare Valley’s exports.

Mr Taylor, a board member of Wine Australia, said adding to the concern was that a four-year $50m support package to help market Australian wine overseas was due to expire mid-year.

He said extending federal funding was vital during the sector’s hour of need – especially at a time when levies paid to Wine Australia from company exports were also dropping.

About 20 per cent of Taylors’ exports are usually China-bound. Mr Taylor said they had been forced to offload containers from a ship in Singapore when the market suddenly closed.

The company also retrenched a staff member as a result of the tariffs.

“If we don’t get good future growth coming through, through industry support … it will start to have an effect on regional employment,” Mr Taylor said.

Improving

trade

partnershi­ps with the US, Canada, Hong Kong, the UK, Japan and other parts of Asia are top of the agenda, but that, too, has come with its own challenges amid internatio­nal travel bans and social distancing restrictio­ns.

Mr Taylor’s brother and winery general manager, Clinton, said the tariffs had come as a shock.

“After years of working to grow our Clare Valley wines in that market, it’s like the rug was swept out from under our feet,” he said.

“It’s important to us that the Australian Government assists the industry in reaching out to new and existing markets by giving us the tools and resources to promote and grow the premium profile of Australian wine,” he said.

ADELAIDE HILLS

Adelaide Hills Wine Region president Jared Stringer says it’s been spared the tariffs’ immediate impacts. But he’s still worried about potential flowon effects, including wine usually destined for China flooding the domestic market, pushing down prices.

“There certainly isn’t going to be a silver bullet here,” said Mr Stringer, also chief executive at The Lane Vineyard.

“All of that supply has to go somewhere. It’s not going to go to China, certainly, and the US isn’t capable of taking it all and neither is the UK.”

Both of those markets were reeling from the effects of the pandemic, which had shut down pubs, clubs and restaurant­s.

“If there’s an oversupply, it means that retailers will go, ‘OK, well I can probably sell what was a $50 Barossa shiraz for $30 so I don’t need to take an Adelaide Hills shiraz,” Mr Stringer said.

“Growers will potentiall­y either see their grape prices slashed or will struggle to sell them.”

AUSTRALIAN bulk wine exports worth more than $50m annually are being barred from China despite being exempt from punishing tariffs on the bottled product.

Warren Randall, owner of Seppelstfi­eld, the world’s leading exporter of luxury-grade bulk wine to China, revealed his business alone has lost more than $15m since the communist regime last month barred the product.

Of the $50m worth of bulk wine exports to China last year, $39m was from South Australia, according to official figures from Wine Australia.

Bulk wine is exported in 24,000-litre bladders. Chinese brands then bottle it under homegrown labels, which sell for about $400 a bottle for top-grade wine from the Barossa Valley and Mclaren Vale.

Bottled wine imports were hit with tariffs of up to 212 per cent in November, but bulk products were excluded.

Mr Randall said five containers of bulk wine had successful­ly been imported through Shandong province ports in December, after the tariff imposition.

“But some time in January, the Chinese central government came out and said that no Australian wine will be cleared from Australian ports – so it doesn’t matter whether there’s a tariff on bulk or not,”

Mr Randall said. “This is not a knockout blow but it does make you stagger around the ring.”

Mr Randall said his firm was contacting Chinese importers one to twice a week and being told they wanted Australian wine but were not willing to take any risks.

“It’s not as if the Chinese don’t want our wine – that’s not the case. They definitely want Australian wine,” he said.

“They definitely want Seppeltsfi­eld wine … bulk wine from the Barossa and Mclaren Vale.

“But they’re concerned about the consequenc­es of importing Australian wine because the central government has categorica­lly stated that no Australian wine will be cleared from Chinese ports.”

Mr Randall said one container of Seppeltsfi­eld tawny port had been caught on Chinese docks in January but eventually let through. Since then, the business had been searching for other markets.

Chinese wine tariffs have cost the industry about $1.3bn, equivalent to 23 per cent of the Australian crop. This equates to about 170,000 tonnes of the national crop – about 10 per cent.

Mr Randall said producers were hoping for a post-brexit free-trade deal with the UK.

But supermarke­ts dominated its market and Australian wine sold there was onethird the value of to China.

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