Australia: ACCC says wine grape growers at disadvantage

Australia’s wine industry needs increased competition among grape buyers to boost its growth prospects, the country’s competition watchdog says.

Some growers are waiting up to nine months to be paid for grapes amid low levels of competition between winemakers, which is also leading to inefficient production and a lack of innovation and investment in the industry, the Australian Competition and Consumer Commission’s (ACCC) deputy chair Mick Keogh said on Monday, July 22.

Reiterating the interim findings of the ACCC’s study of the wine grape industry, Mr Keogh said bargaining power is weighted toward a small number of major buyers and against a much larger number of small-scale sellers.

“The imbalance in bargaining power results in growers accepting contracts with sub-optimal terms, with limited ability to resolve disputes, and having to wait sometimes up to nine months for payment for their grapes,” Mr Keogh said in a speech to the Australian Wine Industry Technical Conference in Adelaide.

“The ACCC’s wine grape market study interim report found these significant issues represent a very real threat to the growth of the wine grape industry, especially in an era of scarce resources such as water.”