Woolworths dials in to wine grape code
Supermarket giant Woolworths has signed up to a voluntary code of conduct to govern its dealings with wine grape growers, as winemakers call for tighter government controls to prevent the company from abusing its market power.
Adelaide winemaker Bob McLean with Woolworths liquor boss Brad Banducci in Sydney.
"We've been looking at it for three months. It's an important part of engaging with the industry," he said, noting that Woolies had already signed up to the industry-led responsible drinking campaign DrinkWise and the Alcohol Beverages Advertising Code this year.
The grower code, formulated by Wine Grape Growers Australia and the Winemakers' Federation of Australia, includes guidelines on the timeliness of payments to grape growers, as well as standard terms for supply contracts, and will primarily affect Woolworths' winemaking business Pinnacle, which produces private-label wines for Woolies' liquor chains.
Mr Banducci said signing up to the code was largely symbolic as an internal audit of Woolies' liquor business showed its processes were already compliant with the guidelines.
He said the company was also "very open" to negotiating a code of conduct with the WFA, which has called for a formal arrangement to prevent Woolies and Coles -- which together control 77 per cent of domestic wine sales -- from abusing their power over wine producers.
The WFA has proposed a code similar to that currently being negotiated between the supermarket giants and food and grocery producers, who have complained that the retailers are able to use their market power to demand unsustainably low prices and retrospective discounts on supply deals that have already been agreed.
The WFA has also said it would work with the Australian Competition & Consumer Commission to investigate claims of unfair dealing against winemakers.
Mr Banducci declined to comment on WFA president Tony D'Aloisio's suggestion that Coles and Woolies' market share should be capped by legislation.
Source: The Australian, 18 September 2013
