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Lack of price transparency harmful to Australian wine industry

The consumer watchdog has warned that a lack of transparency over pricing is restricting competition and growth potential in the Australian wine industry.

The ACCC released an interim report on Monday as part of its market study of the wine grape industry launched in September 2018, detailing proposed measures to address harmful practices including uncertainty over how grapes are priced and assessed for quality and supply contracts that do not offer price certainty to growers.

The study focuses on “warm climate grape growing regions” which include the Riverland, Murray Valley and Riverina.

The ACCC also raised concerns over delayed payment terms for growers, which can sometimes stretch up to nine months after grapes have been delivered to a winery.

“We found that winemakers do not publicise the prices they pay to growers and often have confidentiality terms to prevent growers from disclosing their indicative and final prices to other growers,” ACCC deputy chair Mick Keogh said.

“Meanwhile, various supply arrangements appear to favour incumbent buyers of bulk wine grapes, such as exclusive supply clauses, automatic and long term contract extensions, and difficult contract termination obligations on growers.”

The ACCC’s interim recommendations include requirements to provide indicative and final grape prices to an independent third party for simultaneous public release; shorter payment terms for wine grapes; development of standardised testing for wine grape quality assessments, and improvements to the dispute resolution mechanisms in the Australian Wine Industry Code of Conduct.

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