Second call for mandatory code for wine grape purchasing

Other recommendations include faster payment times to growers, assessing wine grapes on an objective basis, and providing an anonymous complaints channel.

A mandatory code of conduct to govern winegrape purchases has been called upon for a second time.

Last year Dr Craig Emerson, who also conducted an inquiry into supermarkets, was selected to undertake a review of regulatory options for the wine and grape sector.

His 14 recommendations for the sector include a call for a mandatory code of conduct to apply to large and medium-sized wineries purchasing more than 2000 tonnes annually, which is likely to apply to companies responsible for at least 90 percent of all winegrapes purchased in Australia.

An anonymous complaints channel to the ACCC, for grapes to be assessed on an objective basis, and improveD payments times to growers were also recommendations.

This follows a senate inquiry from earlier this year also recommending a mandatory code.

Murray Valley Winegrowers chair Chris Dent said the recommendations aren’t going to solve the current oversupply issues growers are facing, but will hopefully improve the dealings between growers and a minority of wineries.

“(A mandatory code) means hopefully the best practices that are already in place for the majority of grape buying customers, that everyone is subject to those practices. We see it as a way to improve those that are dragging their feet a bit,” he said.

Murray Valley Winegrowers chair Chris Dent. Picture: Zoe Phillips

The main short-term change Mr Dent is looking at is an improvement in payment times, with some payment terms out to almost 12 months from delivery.

“I think it would be good to see grapes paid in full by June 30, that’d be a fair change for the majority of grape growers and winemakers,” he said.

Australian Grape & Wine chief executive Lee McLean.

Australian Grape and Wine chief executive Lee McLean said in terms of creating a level playing field, a mandatory code isn’t a bad thing, but concerns remain over unintended consequences of regulations.

“If the government wants to implement the code, what we’re really strong on is making sure that industry and the right kind of expertise has a seat at the table when it comes to the design of the code,” he said.

“What we don’t want to see is there being perverse incentives to get out of contract or do other things that would actually make growers worse off.”

Mr McLean said the fear of retribution was one of the concerns raised by growers in the context of their relationship to winemakers, but also from winemakers in their relationship to retailers.

“Having an anonymous complaints process makes sense, the trick will be the extent to which the ACCC resources are able to take action,” he said.

The 2025 Australian winegrape crush is estimated to be 1.57 million tonnes, up 11 per cent on last year, but 140,000 tonnes below the ten year average.