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Australia's largest member-owned wine grape cooperative has issued a final warning to a multinational company, requesting a price for grapes, but will not rule out legal action.
Key points:
- Riverland grape growers are yet to receive a final price for vintage grapes supplied to Accolade Wines
- The growers' co-operative CCW has issued a final warning to the company, and says it will consider legal action
- The ACCC says best practice for winemakers is to pay growers within 30-60 days of delivery
Located in South Australia's Riverland, CCW Cooperative represents almost 600 wine grape growers, who supply around 200,000 tonnes of grapes a year to Accolade Wines for processing.
Grape harvest began in the Riverland in late January and most growers had finished picking by May, yet some are still out of pocket for the delivery of their crop.
CCW chief executive Jim Godden said the final price for cabernet sauvignon and shiraz wine grapes, which are in an oversupply across the world, was yet to be determined, which was causing stress to growers.
He said the cooperative had attempted negotiations with Accolade in recent months, including with an independent expert, but there had been no result.
Mr Godden said CCW had presented Accolade with a letter of claim asking for a final price for the grapes, marking a warning before commencing legal action.
"We're exploring the legal avenues that we have, to be able to finalise that process [of getting a price]," he said.
Mr Godden said there was no current deadline on when Accolade would need to provide a final price.
The most recent expected price per tonne price for the grapes, made public, was around $150, minus the levy paid by the grower.
Meanwhile, the average cost of production for growing wine grapes is estimated to be between $300 and $400 a tonne, with increased pressure from higher input prices, such as fertiliser.
"I think if you talk to most grape growers they would say the payment schedules wouldn't cover the cost of production," Mr Godden said.
"That is the difficult question we will be looking at going forward ... 'How do we fund vintage 2024?'"
The ABC contacted Accolade Wines on several occasions for comment but a spokesperson said nobody was available for interview.
Trade transparency
Accolade Wines is a signatory to the voluntary Code of Conduct for Australian Winegrape Purchases, which sets minimum standards for price and quality assessments.
An Australian Competition and Consumer Commission (ACCC) spokesperson said it had advocated for improved price transparency and shorter payment terms for growers, as recommended in its 2019 Wine Grape Market study.
"In the study, the ACCC expressed concerns about delayed payment terms for growers, with these sometimes involving payment up to nine months after the delivery of grapes," they said.
It recommended the best practice for winemakers was to pay grape growers within 30 to 60 days of delivery.
But back in the Riverland, Mr Godden said only the first of three payments had been made to growers, with the full amount due by September, which is the case each year.
From November, the ACCC's unfair contract term laws will be strengthened to include penalties for businesses that do not provide fair contract terms.
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