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Australian winegrape purchases code of conduct
- Committee
- Senate Rural & Regional Affairs & Transport References Committee
- Date Held
- February 07, 2025
- Status
- AI Transcribed
Summary
Chapters
Rural and Regional Affairs and Transport References Committee Hearing Commences
The rural and regional affairs and transport references committee has commenced its hearing into the Australian Wine Grape Purchases Code of Conduct, with senator Matthew Canavan reminding witnesses of their parliamentary privilege and protections.
Addressing the Long-term Structural Surplus in the Australian Red Wine Industry
The Australian red wine industry is facing a long-term structural surplus, and Professor Kym Anderson suggests that the market will adjust as freight rates drop and international demand grows, with improved marketing efficiency and investment in research and development being potential solutions.
Government Support for Riverland Farmers and Grape Growers
Senator Barbara Pocock and Professor Kym Anderson AC discussed government support for Riverland farmers and grape growers, exploring the potential for a mandatory code and the impact of market concentration on the fairness of the wine industry. The conversation covered the complexity of addressing the imbalance in purchasing power and the potential consequences of a mandatory code on independent growers.
Export Prices and Contract Prices for Wine Growers
Senator Whish-Wilson and Professor Anderson discussed the complexities of export prices and contract prices for wine growers, including the role of spot prices and the need for flexibility in contracts, while also exploring the practicalities of a spot market for grapes and the issue of transparency in grape pricing. The conversation concluded with Senator Whish-Wilson indicating that he had completed his questions.
Raising the Levy for the Wine Industry
Professor Kym Anderson AC discussed the potential benefits and challenges of raising the levy for the wine industry, including supporting long-term development and marketing efforts, and highlighted the importance of expanding the marketing budget to increase market share.
Introduction of Department Witnesses and Continuation of Hearing
The hearing continued with the introduction of witnesses from the Australian Competition and Consumer Commission and the Department of Agriculture, Fisheries, and Forestry, and the chair reminded senators of the rules regarding the questioning of departmental officers.
Australia's Wine Sector and the Impact of the China Trade Situation
Senator Glenn Sterle inquired about the China trade situation's impact on the Australian wine industry, with Matt Lowe and Mick Keogh providing insights into the industry's challenges and the government's efforts to support the sector, including a $1 billion reduction in trade value due to the trade disruption and a $600 million impact in terms of return to value since the trade resumed.
Australian Wine Exports to China
Australian wine exports to China have increased to $900,000,000 since trade resumed in March, but it is unclear whether this indicates sustained demand or is just a temporary increase.
Australian Wine Export Markets
Senator Glenn Sterle discussed the potential of new markets for Australian wine with Matt Lowe, highlighting the importance of India, Japan, Korea, Malaysia, and Thailand, and the efforts being made to increase trade with these nations.
Competitiveness of Australian Wine in International Markets
Senator Richard Colbeck discussed the competitiveness of Australian wine in international markets, focusing on the commercial segment and the need to adapt to changing conditions, particularly in developing markets like India and Southeast Asia, where a growing middle class presents opportunities for premium wine sales, but also poses challenges due to regulatory and cultural issues, including limited wine consumption in India to only a few states.
Rotation of call to Senator Pocock
Senator Pocock has been called to ask a question, following Senator Matthew Canavan's acknowledgement of Senator Colbeck, in accordance with standard parliamentary procedure.
Riverland Wine Growers and Dairy Industry Regulation
Senator Barbara Pocock and Mick Keogh discussed the need for a mandatory code for wine growers in the Riverland region, citing the dairy industry's code as a potential model, and highlighting the importance of adequate ACCC resourcing for compliance and enforcement. The ACCC currently lacks resources to take action in the wine grape sector, but a mandatory code could enable them to do so.
Balance of Representation on the Industry Peak Body
Senator Barbara Pocock raised concerns about the underrepresentation of growers on the industry peak body, which is dominated by winemakers, and the department acknowledged these concerns and encouraged industry to address them, while noting that it consults broadly with industry to ensure a balanced view.
Wine Industry Contract Terms and Pricing
The Australian Competition and Consumer Commission is exploring a mandatory code for the wine industry, focusing on fair market price and compliance, while the government plans to amend the Australian Consumer Law to ban unfair trading practices, and a grape price indicator dashboard has been developed to provide insights into grape and wine grape prices.
Large Suppliers and Labeling Regulations
Sen Richard Colbeck discussed labeling regulations with Mick Keogh and Parnos Munyard, focusing on large suppliers mimicking small producers, and the need for case-by-case consideration to prevent misleading impressions, with the Department of Agriculture, Fisheries and Forestry potentially considering information standards as part of a report, and further questions from Sen Matthew Canavan and Sen Pococke indicating the inquiry is ongoing.
Government Assistance for the Wine Industry
Senator Canavan inquired about government assistance for the wine industry, focusing on the issue of oversupply of certain grape varieties and the need for support, with the government stating there are no plans for assistance, despite concerns about the representation of growers in decision-making processes. The conversation highlighted the complexities of the industry and the need for targeted support to address the issues faced by grape growers, with Deputy Secretary Matt Lowe confirming the existence of an oversupply of certain grape varieties.
Payment Terms and Vineyard Registrar for the Australian Wine Sector
The Australian wine sector is addressing payment terms and information gaps, with discussions on reducing payment time frames and developing a national vineyard registrar to support growers.
Adjournment of the Hearing
The chair, Sen Matthew Canavan, has adjourned the hearing, bringing the current proceedings to a close in accordance with standard parliamentary procedures.