ACCC warns winemakers in relations with small businesses

We all love to love Australia’s successful value-adding wine making industry, but it seems all is not bliss on the nation’s vineyards.

A report by the Australian Competition and Consumer Commission just released warns of power imbalances in the grape supply chain being exploited by some wine makers.

The ACCC looked at competition, contracting practices, transparency, and risk allocation in wine grape supply and found potentially unfair contract terms including those imposing lengthy payment periods on growers.

The commission described these as harmful practices stemming from the bargaining weakness of our 6,000 wine grape growers.

ACCC recommended the country’s 2,500 winemakers standardise payment within 30 days of delivery, uniformly assess the quality of grapes and report the prices they pay.

The report found:

# Gowers were small and dealt with large wine makers, with their product likely destined for export.

# There was a lack of transparency and certainty over pricing and quality assessment proceedures.

# Some wine makers imposed delayed payment periods of up to nine months on growers.

# Growers were disproportionally allocated transactional risk by wine makers.

The Australian wine industry employs 175,000 people, and contributes $40 billion to the economy and $2.8 billion to exports.

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