Australian Grape & Wine is pleased to observe that there has been a good response from industry to the ACCC’s recommendation that winemakers bring grower payment terms forward. Several large winemakers have reported that their terms are now more favourable than those required under the Code of Conduct for Australian Winegrape Purchases.
The ACCC considers best practice to be 30 days and that flexibility should not extend beyond 60 day payment terms.
The Code is currently more lenient. It recommends that, as a minimum, winemakers purchasing grapes adopt the South Australian legislated payment terms of one third by the end of the month following the month during which the grapes were delivered, one third by the end of June and the balance by the end of September. It also states that they should pay interest at commercial rates where they fail to meet the agreed payment term.
It should be stressed that this requirement under the Code is considered a minimum and should not be regarded as best practice.
Further information regarding winegrape purchasing, including rules for assessing winegrape quality for the purpose of pricing deductions or rejections, can be found on our website.
We recommend growers encourage their purchasing winery to sign up to the Code. By doing so you will be ensuring that the supply agreement is fair, equitable and mutually beneficial. The Code also seeks to ensure that agreements are clear and in writing and that winegrape quality assessments for the purpose of pricing deductions or rejections are done so according to mutually agreed specifications.
For further information regarding the Code, please contact anna@agw.org.au
