Link between grapes and bulk wine pricing explored

Riverina grapegrowers have been briefed about a study that indicates a correlation between wine grapes and bulk wine pricing.

The analysis comes as growers and winemakers commence negotiations in setting grape contract prices for the forthcoming vintage and calls by growers that irrigation water costs represent a significant factor in their current growing costs.

A summery on the study completed by Jim Caddy, chair of the Inland Wine Regions Alliance, was presented by the Winegrape Marketing Board’s (WGMB) CEO Brian Simpson to member growers at their Strategic Plan and Budget Setting acceptance meeting held in Griffith this week.

Simpson said the comparisons made were based on Riverina grape prices for the 2018-19 financial year and indicated the consistent correlation between bulk wine and grape prices by variety paid to growers.

Simpson commented that inland wine grape crops were expected to be down next vintage and wineries have capacity to pay increases for their grapes.

Members approved the Strategic Plan and confirmed the grower levy of $3.90 per tonne for fees and charges for the forthcoming year.

The meeting also adopted a $1 per tonne levy return due to surplus funds held by WGMB on the 2019 harvest.

ACCC acting director Ag Unit, Mark Laybutt addressed the meeting to explain the recommendations and ongoing work from the ACCC’s report into the market review of the winegrape industry, including quality assessment standards, price transparency, indicative pricing, contacts and Code of Conduct including payments to growers.

Brian Simpson has been invited to participate in the Code of Conduct Review Committee. He said he was keen to see grower payments from wineries to be made within 30 days by the 2021 vintage.

Water supply and its costs were the subject of questions at the meeting with members questioning the NSW government’s failure to respond to requests to return a 5% environment allocation deducted on a one-off basis in 2002 but not restored to growers’ allocations, except only in the wettest of seasons.

The meeting also adopted increases in director’s fees and chair and deputy payments which will be recommended to the NSW Minister for Agriculture for approval.

Photo: (L-R) Brian Simpson, CEO Riverina – Wine Grape Marketing Board, with guest speaker Mark Laybutt, Acting Director ACCC Agriculture Unit and Bruno Brombal, Board chairman.

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