In July, Australian Grape & Wine has welcomed the release of Dr Craig Emerson’s Review of Regulatory Options for the Wine and Grape Sector commissioned by the Albanese Government. The report was funded by the Government’s generous Grape and Wine Sector Long-term Viability Support Package.
The inquiry sought to identify market failures within the grape and wine supply chain that should be addressed with regulatory or other interventions. A key objective of its recommendations was resolving power imbalances between larger winemakers and grape growers in the winegrape market, particularly in inland growing regions. The report also acknowledges the imbalance of power between winemakers and retailers suggesting softer non-regulatory measures including improved data access, better information for consumers about retailers’ own brands and a confidential channel for suppliers to report possible breaches of the Competition and Consumer Act 2010 by retailers along with measures to protect against retribution.
The report’s primary recommendation was the establishment of a mandatory code of conduct for those whose purchases of grapes exceed a three-year moving average of 2,000 tonnes per annum. Unlike the current voluntary Code, which has no formal enforcement mechanism other than removal and reporting of signatories in breach of it, a mandatory Code would be enforceable by the Australian Competition and Consumer Commission.
A welcome response has been the agreement by both Coles Group and Endeavour Group to be more transparent to consumers. Coles has agreed to accelerate its implementation of improved labelling by including Liquorland and the company’s address on the back of labels within two years. Similarly, Endeavour also undertook to publish its name and address on the back labels of their own-brand wines. Australian Grape & Wine would like to acknowledge the support of these two major liquor retailers in this regard. A further win for the sector has been the improved market information coming from Endeavour from which others in the sector can benefit.
The Australian Grape & Wine executive has had some productive discussions to better understand both government and industry sentiment towards Dr Emerson’s report with various stakeholders including the Code Management Committee and the Department of Agriculture, Fisheries and Forestry. The results of those discussions have informed a strategic approach to advocating for the best possible outcome for industry, if or when, the Minister announces her support for a mandatory Code (which could happen within the coming weeks).
In developing policy responses, consideration has been given to the breadth of member views. For example, we have heard from growers that they hold concerns with respect to waiting two years before any consideration is given to the enforcement of better payment terms. Australian Grape & Wine is also aware that there are mixed views across industry as to the appropriateness of certain recommendations including the 2000 tonne threshold, given that there are close to 80 signatories at present to the voluntary code and only approximately 35 would be captured under the proposal. Australian Grape & Wine is prepared to work with government and industry to consider how these types of issues could be resolved, such as through voluntary sign-up mechanism for smaller producers wanting to demonstrate their commitment to fair and equitable trading practices. Winemakers and growers have also presented various concerns about the unintended consequences that could arise depending on how recommendations are interpreted and translated into law. As the old adage goes, the devil will be in the detail. This further highlights the importance of the Government’s commitment to effective industry input towards designing a high functioning mandatory code
