Wine and grape sector review report has 14 recommendations

Making the voluntary code of conduct mandatory, transparent labelling practices and a review of the Wine Equalisation Tax (WET) are three of the 14 recommendations made by Dr Craig Emerson in his independent impact analysis of trade and competition dynamics in the grape and wine sector.

The report ‘Review of Regulatory Options for the Wine and Grape Sector’, released on 14 July by Wine Australia, examines fair trading, competitive relationships, contracting practices and risk allocation between grape growers, winemakers and retailers.

The imbalance in bargaining power between large businesses and their small suppliers is a major focus in Emerson’s report, which notes that the long-term sustainability of the sector depends on fair conditions for the primary producers responsible for our world-class wine.

The report recommends that the current industry-led voluntary code of conduct be replaced with a mandatory code, which should be enforceable by the ACCC and apply to large and medium-sized wineries buying winegrapes from external providers — those with annual grape purchases exceeding 2000 tonnes (calculated on a three-year rolling average basis).

Minister for Agriculture, Fisheries and Forestry Julie Collins, who requested the review of the sector back in August 2024, thanked Emerson for the comprehensive report that provides advice about regulatory or other interventions.

“The Albanese Labor government is committed to supporting the profitability, productivity and resilience of the Australian grape and wine sector,” Collins said.

“Our government is committed to ensuring that our grape and wine sector receives the support it needs to flourish and prosper in the years to come.”

The national association of grape and wine producers, Australian Grape & Wine, has welcomed the release of report, noting that it identifies significant power imbalances in the supply chain and also recommends reforms designed to improve transparency, payment terms and dispute resolution processes. 

The Chief Executive of Australian Grape & Wine, Lee McLean, said the organisation would now take the time to work through the recommendations in detail, in consultation with members and stakeholders across the sector.

“This is a substantial report tackling complex issues, and we acknowledge the significant work undertaken by Dr Emerson and his team,” McLean said.

“We recognise the need for change and reform in some areas of our sector and will work constructively with the Australian Government as it considers its response. It is essential that industry has a strong voice in the next phase to ensure any measures brought forward are fit for purpose, deliver real benefits for both grape growers and winemakers, and avoid any unintended consequences.”

McLean noted that the review process had brought forward a wide variety of views from across the industry, reflecting the diversity of business models and regional contexts that make up the Australian grape and wine sector.

“Striking the right balance will be critical. What works in one region or business model may not be appropriate in another, and Dr Emerson has clearly acknowledged that in the consultation process,” he said.

The Australian Government said it will now closely consider Emerson’s 14 key recommendations, and plans to work with industry and stakeholders to establish the best way forward.

Australian Grape & Wine supports the recommendation to establish a working group to guide the design and implementation of reforms that may be adopted by the government, but said industry needs a seat at the table in this process.

“This is an opportunity to create a more transparent, fair and resilient sector. With meaningful industry involvement, we can get the settings right for long-term success,” McLean said.

The full report is available for download here. 

Image credit: iStock.com/Mr.Bon