Senate Committee Report released – Australian winegrape purchases code of conduct

Overview

On Friday, 28 February, the Senate Rural and Regional Affairs and Transport References Committee released its report into the Australian winegrape purchases code of conduct. The report includes five key recommendations aimed at improving fairness, transparency, and sustainability within the sector.

Australian Grape & Wine welcomes the release of the report and is carefully considering its recommendations. We note that the Government is yet to respond and is unlikely to do so until the completion of the Grape and Wine Sector Regulatory Impact Analysis led by Dr Craig Emerson, which covers similar issues. This response is not expected before the federal election.

Key Recommendations and AGW’s Response

Recommendation 1: Mandatory Code of Conduct The Committee recommends the development of a mandatory code of conduct for winegrape purchases, focusing on fair payment terms, quality standards, earlier indicative pricing, and binding dispute resolution.

AGW Response: We are open-minded about a mandatory code and support incorporating elements of the existing voluntary code where appropriate. However, any transition to a mandatory model must involve thorough consultation to ensure fair outcomes for both grape growers and winemakers while avoiding unintended consequences.

Recommendation 2: Improved Industry Data Wine Australia should continue to enhance its data collection and dissemination to better inform industry stakeholders.

AGW Response: We strongly support this recommendation. Reliable data is crucial for informed decision-making across the sector, and we acknowledge ongoing efforts to improve industry insights.

Recommendation 3: Distillation of Excess Wine The Australian Government should explore options to distil surplus wine into industrial alcohol or otherwise manage the oversupply.

AGW Response: While we recognise the importance of addressing the supply-demand imbalance, this option requires careful consideration of its long-term effectiveness, market feasibility, and logistical costs. Further analysis is needed before determining its viability.

Recommendation 4: Transition Support for Growers The Australian Government should investigate support packages for growers transitioning out of winegrape production or into alternative crops.

AGW Response: We strongly support this recommendation and have consistently called for assistance for growers in our Pre-Budget Submissions. Transition support must be dignified, targeted, and practical to help affected growers navigate structural change in the sector.

Recommendation 5: Industry Investment and Market Expansion AGW should provide an updated Pre-Budget Submission outlining the current industry situation. The Department of Agriculture, Fisheries and Forestry should invest in market expansion and domestic promotion.

AGW Response: We submitted an updated Pre-Budget Submission in January 2025, outlining urgent measures to address the industry crisis. Policy solutions alone will not resolve the oversupply issue—we need immediate investment in initiatives that drive demand and support structural change.

Additional Comments from Labor Senators

Labor Senators have expressed concerns about two recommendations:

• Recommendation 3 (Distillation of excess wine): Labor Senators argue that subsidising distillation would not address the long-term supply issues and could encourage ongoing overproduction. They believe it is not an effective response due to the low net return after transport costs.
• Recommendation 4 (Transition support for growers): Labor Senators warn of a potential “moral hazard” in providing transition support, arguing that such payments could delay necessary adjustments and prove inefficient. They also note that previous vine pull programs in Australia were not considered successful.
• Labor Senators recommend waiting for the release of Dr. Craig Emerson’s Grape and Wine Sector Regulatory Impact Analysis before taking any further action.

Additional Comments from Greens Senators

The Australian Greens have proposed modifications to strengthen Recommendation 1 and additional measures:

• Mandatory Code of Conduct: The Greens recommend that the Code include a requirement for indicative pricing to be published by 30 September each year. They also propose applying the Code only to winegrape purchasers exceeding a yet-to-be-determined tonnage threshold.
• Interim Measures: Before the mandatory code is implemented, the Greens propose that indicative prices be made compulsory by 30 September 2025 and that expert determination processes be legally binding and enforceable with penalties.
• Winemaker-Grower Representation: The Greens recommend that the Government mandate a 50-50 representation model for winemakers and grape growers in peak industry bodies.

What Happens Next?

The Government will now consider the report’s recommendations, but a formal response is unlikely before the federal election. AGW will continue advocating for urgent industry support, particularly in securing government investment to rebalance supply and demand.

We will keep members updated on further developments and continue engaging with policymakers to ensure practical and effective outcomes for our sector.

For further information or to discuss the report’s implications, please contact the AGW team.