Australian Grape & Wine (AGW) has welcomed the Australian Competition and Consumer Commission’s (ACCC) announcement which highlights the ongoing improvements in commercial arrangements between winegrape growers and winemakers.

Following on from its 2019 Wine grape market study, the ACCC has worked closely with a number of winemakers, grower groups, and Australian Grape & Wine to further implement improvements in standard form contracts, particularly in relation to wine grape quality assessments, and how contractual disputes are managed.

In parallel with this process, AGW has been working to modernise and improve the voluntary Australian Wine Industry Code of Conduct, which will deliver greater transparency and certainty in commercial dealings.

AGW has been working with the Australian Wine Research Institute (AWRI) to develop improved grape sampling and assessment protocols, and with Wine Australia to improve the delivery of better and timelier market information to grapegrowers to inform their decision making.

Tony Battaglene, AGW chief executive said, “I am very pleased with progress on the Code and the technical work underway”.

“Better information on market trends will help growers negotiate with wine companies on price. The work we are undertaking with AWRI will also lead to more transparent wine grape assessments, removing one of the key areas of contention between growers and winemakers.”

The ACCC has also expressed concerns about lengthy payment periods specified in grape supply agreements, noting the majority of payment periods continue to extend beyond the ACCC’s recommended thirty-day standard for winemakers.

Tony Battaglene continued, “We recognise there are various points of view in relation to payment terms, including the ACCC’s target for thirty-day terms”.

“We know many growers agree with the ACCC’s position, while others would prefer the tiered payment system, as it may provide higher prices,” he said.

“We encourage all businesses to improve payment terms through negotiation and fair and transparent contractual arrangements.

“Of course, payment terms between grape growers and winemakers are a central focus for the ACCC, but the principles should apply right along the supply chain. There is no doubt that the adoption of better cash-flow arrangements helps all parties.

“The Code is a living document and is subject to ongoing review. We’re working hard to review and improve the code so that it is more effective in today’s commercial environment, and flexible enough to encourage open and balanced negotiations.

“However, a Code is not a silver bullet to better relationships. The onus is on all in the supply chain to create strong and harmonious commercial relationships. For growers, if you need help with payment terms, or have any other concerns pick up the phone and talk through the issues.”

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