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.