With vintage 2019 fast approaching, it is timely to remind winemakers and grape growers to ensure their contracts are up to date and that they are applying best business practice. Australian Vignerons (AV) and Winemakers’ Federation of Australia (WFA) support transparency about price and quality determination and trading practices in the supply chain.
The Wine Industry Code of Conduct is a voluntary code established by WFA and Wine Grape Growers Australia (now AV), to provide a set of minimum standards for dealings between winegrape purchasers who are signatories, and winegrape growers.
No matter how good a commercial relationship may be, disputes may arise. Critically, the Code provides a valuable mechanism to resolve some of these disputes avoiding costly legal action.
The Code requires a price offer or a negotiation as part of the calculation of the price for each variety of winegrape (referred to as Indicative Regional Prices). It is important that both parties realise that indicative prices, like contractual arrangements are confidential agreements that cannot legally be shared amongst buyers or sellers. The sharing of pricing arrangements by either party outside of a contractual arrangement could be considered anti-competitive behaviour, which is illegal.
Tony Battaglene, Chief Executive of the Winemakers Federation of Australia said, “Contractual arrangements between growers and winemakers are a crucial part of doing business. The Code of Conduct remains an important tool to resolve disputes, quickly and cost effectively. We always hope disputes won’t arise, but it is always possible, in even the best of trading relationships."
Anna Hooper Chief Executive of Australian Vignerons said, “It’s important that as an industry we continue to promote fair and equitable dealings and that pricing is determined and disclosed in a manner that’s transparent and mutually understood.”
For information about becoming a signatory to the voluntary Australian Wine Industry Code of Conduct visit the website here.
Discussion paper on amalgamation of Australian Vignerons (AV) and Winemakers Federation of Australia (WFA)
There have been discussions over the years for reform of the grape and wine sector representative bodies, with a particular sentiment for greater unity and representation of the sector as a whole.
Federal politicians of all parties have also made it very clear that representation from a single body for the grape and wine sector, would not only be most welcomed, but advocacy efforts would be strengthened.
Australian Vignerons (AV) and Winemakers Federation of Australia (WFA) have been holding discussions on how to achieve better service delivery for the whole sector. The consensus is that the creation of a single body to represent the interests of grape growers and winemakers would enable stronger advocacy and better representation for the sector. We believe that an amalgamation of the two peak bodies would best achieve these outcomes.
We believe that a single body will deliver better outcomes for both grape growers and winemakers and will lead to practical reform for the long-term and sustainable representation and advocacy for the Australian grape and wine sector.
What will the new body do?
The main goal of AGWI will be to provide united national advocacy on behalf of grape growers and winemakers, by:
To read the rest of the discussion paper, click the button below to download.
Growers will be given the chance to have their say about competition issues and contracting practices after the ACCC announced it will be conducting a market study into the wine grape industry.
The study is a result of concerns raised by wine grape growers and will examine competition, contracting practices, transparency and risk allocation issues in the wine grape supply chain.
The ACCC has released an issues paper and are seeking submissions from people involved in the industry on:
The ACCC will be holding public forums in wine grape growing areas to hear directly from interested stakeholders. Details will be announced on our website soon.
For the results of the ACCC survey, conducted in July and August 2018, please visit: Grape growers survey.
If you would like to make a submission, visit the ACCC website for more details - https://www.accc.gov.au/focus-areas/market-studies/wine-grape-market-study/issues-paper