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
Notice to members: Proposed amalgamation of Australian Vignerons and Winemakers' Federation of Australia
As many of you know, 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.
It is in response to this feedback that Australian Vignerons (AV) and Winemakers Federation of Australia (WFA) have been holding discussions to create a single advocacy body to represent the interests of grape growers and winemakers.
Our aim through this proposed amalgamation is to strengthen the voice of our industry in Canberra, increase efficiency and most importantly, ensure the interests of our members are advocated for at the highest level.
The Federal Government has advised that representation from a single body for the grape and wine sector would not only be welcomed, but also strengthen advocacy efforts.
We are now in the process of formally discussing what a single organisation could look like. The board members of WFA and AV have supported this move and we are working with external legal advisors to direct us down this path.
We believe that a single body will deliver better outcomes for grape growers and winemakers and will lead to sustainable long-term national representation for the Australian grape and wine sector.
The next steps:
The work we have achieved over many years to ensure the interests of grape growers are advocated for will continue. We look forward to being able to deliver more for our members, and the sector as a whole, should the membership of both AV and WFA support the proposed reform.
Members will be kept informed of the process as it evolves over the coming weeks.
Your opinion is important to us. If you have any ideas, issues or concerns please do not hesitate to contact me directly at any time on 0427 685 077 or firstname.lastname@example.org.
Chief Executive Officer, Australian Vignerons
Independent Chair, Australian Vignerons
Earlier this month I attended the NSW Wine Industry Innovation Forum. The forum serves as an opportunity for the NSW Wine Industry to engage key personnel, across many technical disciplines and all regions to capture their perspective on the current research, development and extension needs for the NSW Wine Industry. While these events are always a great platform for Australian Vignerons, as a vigneron myself, I always listen to the technological and industry developments for growers with a keen ear.
The priorities for grape growers highlighted at the forum align with many of the goals Australian Vignerons is working towards improving. Grape prices, better recognition and measurement of objective quality measures and the need to maintain and improve access to agrichemicals. It was good to see that as an industry we are aligning our goals so we can better work together to achieve outcomes for growers.
Other highlights of the forum included:
Interestingly, one of the most critical issues to emerge at the forum was the absence of a younger generation of Viticulturists studying at university. Enrolments in Viticulture degrees at a university has declined in recent years with Curtin University in WA cancelling the degree after only 11 people enrolled one year. As an industry, this is definitely an area we need to work on if we are going to sustain our world-leading grape growing practices and standards.
Overall it was a fantastic event and grape growers have a lot to be excited about. We will keep you up to date with the latest developments to come out of the forum as they come to hand. Perhaps in the meantime have a chat to teenagers around you about viticulture, you never know, you may inspire their future career!
Australia’s winegrape crush in 2018 was 1.79 million tonnes, just above the long-term average of 1.76 million tonnes, and the average purchase price for winegrapes increased by 8 per cent to $609 per tonne, the highest level since 2008.
Wine Australia Chief Executive Officer Andreas Clark welcomed the increase in the average purchase price.
‘The increase in grape prices applied to both red and white grapes, with red grape prices increasing by 11 per cent to $768 a tonne while values for white varieties increased, on average, 5 per cent to $444 a tonne’, Mr Clark said.
Winemakers’ Federation of Australia Chief Executive Officer Tony Battaglene said another good vintage was welcomed by winemakers and provided the raw materials for the quality wine required to supply our growing export and domestic demand.
Australian Vignerons Chief Executive Officer Anna Hooper welcomed the increase in price per tonne and hopes to see the trend continue in order to ensure the sustainable pricing for winegrapes in the longer term as the recognition of Australia’s wine quality proposition continues to grow.
The divergence between red and white average prices has increased steadily since 2011, driven by strengthening relative demand for red wine.
Despite the higher prices, the total estimated value of the crush decreased by 3 per cent to $1.11 billion, reflecting the 10 per cent reduction in total crop size from the record 2017 vintage of 1.99 million tonnes.
The decline in tonnes compared with last year was greatest in percentage terms in the cool/temperate regions, which were down by 20 per cent overall, while the warm irrigated regions (Riverina, Murray Darling–Swan Hill and Riverland) were less affected by the drier spring and summer, with yields down just 5 per cent.
Figure 1 Total winegrape crush in Australia 2009–2018
Mr Clark said that while production of red grape varieties had decreased by 15 per cent on 2017 figures, it had to be remembered that the above average 2017 vintage had seen tonnages increase by 12 per cent, meaning that the 2018 vintage was effectively a return to long-term averages.
The decline in the white variety crush was only 4 per cent compared with 2017, leading to a reduction in the red share from 55 per cent to 52 per cent of the crush, in line with the 3 year average.
Of the major varieties, Shiraz tonnes decreased by 17 per cent, Cabernet Sauvignon by 14 per cent and Merlot by 19 per cent.
Chardonnay was the only major variety to go against the trend, increasing by 9 per cent and restoring its share of the white crush to 47 per cent after falling to 42 per cent last year.
The proportion of winery-grown fruit decreased from 33 per cent of the crush in 2017 to 31 per cent in 2018.
The calculated average purchase price of $609 per tonne, was up by 8 per cent on the price of $565 a tonne calculated in 2017. This figure is the highest since 2008 and above the average price across the past 10 years of $508 per tonne.
It is the fourth consecutive vintage where the average purchase price for winegrapes has increased. Since hitting a low in 2011, the overall average grape price has increased by a compound annual rate of 6 per cent over the past 7 years. However, the average is still roughly two-thirds of its peak in 2001.
The overall average purchase price of red grapes increased by 11 per cent from $692 to $768 per tonne, while the average price of white grapes increased by 5 per cent from $421 to $444 per tonne. The divergence between red and white average price has increased steadily since 2011, driven by strengthening relative demand for red wine.
Each of the top 10 red varieties showed increases, with Shiraz up by 8 per cent (on top of a 12 per cent increase in 2017), Cabernet Sauvignon up by 14 per cent and Merlot up by 18 per cent. Among the whites, Chardonnay increased by 5 per cent despite a significant increase in tonnes produced, Sauvignon Blanc increased by 4 per cent and Muscat Gordo Blanco increased by 3 per cent. The only white variety to decline in overall average price was Pinot Gris/Grigio (down 1 per cent).
The National Vintage Report is based on a survey of winemakers conducted in May–June 2018. Responses were received from more than 400 businesses, including all wineries known to crush more than 10,000 tonnes, and they are estimated to account for 85 per cent of all winegrapes crushed in 2018.
Click here to read the full National Vintage Report
Australian Vignerons welcomes the announcement of a grower survey from the Australian Competition and Consumer Commission (ACCC) into business practices within the wine grape industry.
The ACCC survey comes following reports from growers about delayed harvesting in 2018. This is just one issue growers face, with the ACCC survey looking to learn about a whole range of issues in the industry.
Over many years, Australian Vignerons has maintained a active voice to the ACCC to build a strong working relationship. As an organisation, AV has long campaigned on the behalf of growers to ensure they are receiving a fair go.
Australian Vignerons CEO, Anna Hooper says 'The announcement of the survey for growers to have their say about the industry is a fantastic step forward. The ability for growers to share their concerns directly with the ACCC is something none of us should take for granted. I encourage everyone to get online and fill out the survey as soon as possible.'
Growers have until August 10 to complete the survey which is available on the ACCC website.
For the past 18 months a national steering committee, comprised of representatives from the AWRI, Australian Vignerons, McLaren Vale Grape Wine and Tourism Association, Wine Australia and the Winemakers’ Federation of Australia, has been working to improve the way sustainability programs are delivered to the Australian grape and wine sector.
In August last year, the steering committee commissioned an independent, holistic independent review of the current global sustainability landscape.
The review sought to understand:
The review included 65 interviews with a diverse selection of industry personnel – both in Australia and overseas – including independent growers, regional associations, international buying managers (trade customers), national bodies and marketing and finance executives. The final report is highly detailed and includes 31 recommendations for future research, development, member engagement and marketing.
In brief, the report recommends that:
The report recommendations have been included in a business plan which is expected to be implemented in the next 12 months.
To read more about sustainability in the grape and wine industry, check out the latest Entwine newsletter by clicking the button below.
Text source: Entwine Australia June Newsletter
Throughout May Australian Vignerons was a part of the Wine Grape Council of South Australia's grower roadshows. The roadshows brought together the main organisations for wine grape growers to one location in each of the six main wine grape growing regions of South Australia.
The roadshows were an opportunity for growers to learn from the organisations here to help them. However, the highlight for Australian Vignerons was the chance to meet growers face to face, listen to their concerns and take a list of priorities back to Adelaide to work on.
Our presentation to growers
The key message of the Australian Vignerons (AV) presentation was highlighting the importance of representation at a national level. In a nutshell, AV exists to represent growers on national issues determined by the Federal Government. AV is recognised under the Wine Australia Act as the representative organisation for winegrape growers.
Why is a national voice needed?
A strong national voice is insurance against poor policy that may have a negative impact on your businesses and livelihood.
An example of where the absence of national advocacy had a catastrophic effect on an industry is the 2011 live cattle export shutdown. Exports of cattle dropped 42% in one year, farmers were hit hard and many associated businesses suffered. A Senate report has since found that the cattle industry was unable to provide effective advocacy and that this contributed to the low level of understanding within the government which led to the industry shut down.
AV exists to prevent a similar event happening in the wine industry. We're here to represent the voice of growers independently but to also combine forces with Winemakers' Federation of Australia on areas of common interest.
What did growers have to say?
The main feedback we had from growers on national issues was concerns about delayed harvesting as a result of legislation changes (more on that later), the threat of anti-alcohol lobby groups and greater clarity on the roles of each grower organisation.
What are we working on?
Grower feedback has given us a great list of priorities to work on alongside our usual day to day activities.
How can you get involved?
Your feedback and thoughts are what we use to determine the way forward. Our volunteer independent board is made up of industry experts here to help growers. Please don't hesitate to get in touch and have your say.
Australian Vignerons (AV) is concerned about reports of yield reductions in vineyards as a result of delayed scheduling of harvest by purchasing wineries.
While Vintage 18 was certainly a year where flavour development lagged behind Baume increases in many regions, 2018 has also coincided with a change to the Australia New Zealand Food Standards Code that allows the addition of water. This regulation states:
“Water may only be added to wine, sparkling wine and fortified wine to facilitate fermentation if the water is added to dilute the high sugar grape must prior to fermentation and does not dilute the must below 13.5 degrees Baumé.”
Philip White has written an interesting piece about the potential benefits to wine quality and balance when water additions are made for achieving balance or as a consequence of heatwaves, therefore correcting problems that challenge winemaking practice.
However, AV has heard some concerns from growers who believe that during the last vintage that in some cases fruit was left to “hang” longer than should have been necessary. The cause of their concern is that with extended “hang time” the resulting desiccation can lead to substantial yield loss.
As Philip White has suggested, there are some with concerns that the new regulation relating to water addition may allow some winemakers to leave fruit hanging without them suffering a penalty of fermentation problems of extraction losses, but growers may suffer significant yield penalty.
AV is consulting with its member base to ask growers if they believe this was a problem during the recent vintage. We encourage any member with concerns to contact us and we are looking into whether we can assist.
Please send an email to email@example.com or give us a call on (08) 8133 4400.