WFA and ACCC to study the wine grape industry

28 September, 2018 by Andy Young

The Winemakers’ Federation of Australia has said it is looking forward to working with the Australian Competition and Consumer Commission (ACCC) on its new market study into the wine grape industry.

The market study, which was announced by ACCC Deputy Chair Mick Keogh yesterday, will look at competition, contracting practices, transparency, and risk allocation issues in the wine grape supply chain.

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WFA Chief Executive, Tony Battaglene, welcomed the study, saying that any work that helped strengthen relationships between growers and wine producers was a good thing.

“It is a very competitive market place and it is important that we work across the whole supply chain to smooth relationships. There is already a very good voluntary code of conduct in place in the sector and we look forward to any ways that we can improve this that may arise from the study,” said Battaglene.

In July and August 2018 the ACCC invited wine grape growers across Australia to provide feedback about competition issues in the industry through an online survey. The ACCC is now seeking submissions from right across the Australian wine sector to help paint a comprehensive and balanced picture of the dynamics at play within the industry.

“We are finally starting to experience renewed growth in the sector after several tough years, and it is great to see grape prices improving and profits for growers and winemakers returning”.

Battaglene added: “It is important to provide the ACCC with an accurate picture of our industry as they undertake this study. WFA will work closely with the ACCC to provide this, but it is important that winemakers have their say.”

The ACCC is seeking this information through written and oral submissions in response to the issues raised in its issues paper.

“I encourage winemakers to read the issues paper released by the ACCC today, and to make a submission to this market study,” Battaglene said.

In announcing the study, Keogh said: “We are undertaking this market study after wine grape growers raised concerns about a range of competition issues and contracting practices in the industry.

“Growers have told us they carry too much of the risk in their contracts, and many say there is a lack of competition between buyers for their grapes.

“Some growers have also told us that they receive limited pricing information and are subject to opaque quality standards imposed by winemakers, which can have a major impact on prices they receive for their grapes,” Keogh said.

“We want to get to the bottom of these concerns and, if necessary, make recommendations to improve the competitiveness of the market.”

He added: “We want to hear from anyone involved in the industry from any side who has information relevant to this study. If there are those who’d prefer to remain anonymous, our teams are used to handling sensitive, confidential information and we encourage people to get in touch – whether it is on or off the record.”

The ACCC will hold public forums in a number of wine grape growing areas to hear directly from interested stakeholders. The dates and locations of the consultation forums will be announced on the ACCC’s website soon.

The ACCC will analyse information collected from submissions and forums and will publish draft findings for further comment, likely in the first quarter of 2019 with a final report before the end of June.