Wine grape growers to meet consumer watchdog over pricing

The commercial red grape industry, already in a heavy downturn, is facing another hurdle with claims of a fresh squeeze.

Grape growers have raised red flags with the consumer watchdog, claiming retailers are reducing prices paid to wineries and placing further stress on an embattled red wine grape industry.

The Riverina Winegrape Growers Association will meet with the ACCC later this month to discuss the situation, while association chief executive Jeremy Cass also pressed the issues in a letter to Federal Agriculture Minister Murray Watt.

“Wineries have asked us to approach the ACCC on their behalf, as (some retailers) are buying wine from the bulk market for 30 cents per litre or less and telling wineries that if they don’t compete, they will lose shelf space,” he wrote.

Bulk wine is commercial wine sold at a much lower price than bottled wine and transported in containers and, sometimes, blended with other wines before being bottled.

Grape growers fear a bargaining power imbalance will force wineries to cut weighbridge prices to stay competitive. Picture: Zoe Phillips

It is believed Mr Watt will meet with South Australian wine leaders today to discuss the issues and opportunities for the industry.

Mr Cass claimed one winery was allegedly dropped by a retailer after wanting to increase the price of a case of wine by $1 as, due to inflation, they would make a loss by supplying at the usual price.

He asked Mr Watt to intervene in the situation, claiming a bargaining power imbalance could force wineries to cut weighbridge prices to stay competitive.

Mr Cass said prices as low as $150 per tonne per grower, capped at 15 tonne to the hectare, had already been suggested by one winery, “this is 15 cents worth of grapes per bottle of wine, which is less than the cost of bottle labels.”

“(That) equals a return of $2250 per hectare, while the minimum cost of production that you could expect is at least $1000 per hectare more than this if you trim the hell out of it and don’t pay yourself anything,” he wrote.

The commercial red winegrape industry is in a heavy downturn, driven by China imposing punitive tariffs on Australian imports in late 2020 and a global supply chain crisis that conspired to create a market glut.

Red winegrape growers also recently received the crushing news that wineries would not be taking up to 40 per cent of this year’s crops.

The ACCC conducted a market study into the Riverland, Murray Valley and Riverina wine grapes sector in 2018-19 to question competition, contracting practices, transparency and risk allocation through the supply chain.

A 2021 review of its own study found price transparency to be a lingering concern.

Mr Watt told The Weekly Times that, in response to ACCC recommendations, the government provided a $989,000 grant to create an online wine grape price indicator.

“The project will fill a significant gap in current knowledge on the domestic market,” he said.

Meanwhile, Mr Watt said there were a range of support measures available to growers contemplating switching to other plantings during the current downturn.