Wine contracts in sight of ACCC report

Wine contracts in sight of ACCC report

Horticulture
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EARLY price indications and the removal of long-term payment periods are among some of the recommendations to come out of an investigation into Australia's wine industry.

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EARLY price indications and the removal of long-term payment periods are among some of the recommendations to come out of an investigation into Australia's wine industry.

The Australian Competition & Consumer Commission announced it would be conducting a market study of the Australian wine grape industry, focusing on identifying market failures or trade practices that prevent the functioning of competitive markets or result in detriment to wine grape growers, in September.

It has just released its interim report with feedback invited until June 28.

Recommendations focused on price and contracts, such as winemakers being required to provide an indicative price for grapes to an independent body by December 8 with a final price available by May 1.

It also called for the end of long-term payment periods, with an industry standard for all payments in full within 30 days after grape delivery.

It also asks for contracts to be reviewed to remove unfair terms and for the voluntary code of conduct to be strengthened to ensure all winemakers in Australia with crushing capacities above 10 000 tonnes become signatories.

"The impact of the decade-long period of oversupply remains evident in many of the contracting practices that currently exist between growers and winemakers," the report said.

"In particular, it resulted in growers placing great importance on securing a buyer for their grapes over the medium to long term."

The report also identified the Riverland as receiving the lowest returns of the three warm climate areas.

Another recommendation identified the need the development of uniform standard testing of grape quality.

Australian Grape and Wine Inc welcomed the interim report into Australias wine sector, with chief executive Tony Battaglene saying it was an important milestone in a deep and comprehensive look at the Australian wine sector.

"We appreciate the ACCCs efforts to engage closely with Australian Grape & Wine and our members, and we look forward to continuing this collaborative approach," he said.

The interim report covers a broad range of issues relating to the dynamics between winegrape growers and winemakers in Australia, and presents a set of draft findings and recommendations for consideration by the sector.

"Australian Grape & Wine looks forward to reading this interim report in detail and working with the ACCC to ensure its final report reflects the needs of Australias winegrape growers and winemakers," he said.

"Australias wine sector is now in a relatively strong position.

"At the same time, any opportunity to further strengthen commercial relationships in the Australian wine sector is positive.

"We encourage winegrape growers and winemakers to make sure their views are taken into account in the process."

The interim report can be found at accc.gov.au/focus-areas/market-studies/wine-grape-market-study/interim-report

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