Stephen Strachan, CEO of the Winemakers Federation of Australia (WFA), believes that while there is no need for the government to become involved in the issues of wine grape oversupply or the relationships between winemakers and winegrowers, that a small measure of good has come from the recent Senate rural affairs committee into the operation of Australia’s wine industry. This concerns the issue relating to the issue of unconscionable conduct in variation clauses between makers and growers. ‘Wineries do have variation clauses in contracts that reflect the long lead time in the industry and market, but I acknowledge that they should always have to defend them (legally) if challenged’, says Strachan. In other words, he believes that whatever they might change in a contract should not represent unconscionable conduct towards the grower. He believes that any monies spent on developing a national register of vineyards would best be spent in better understanding international and domestic markets. ‘We already have very good forecasting mechanisms in place and there’s no point in spending money on a new system to get results that might be 97% accurate instead of the 95% we are already getting’, he says. Strachan does not see the value in instigating a mandatory code of conduct between makers and growers since the WFA is already looking to put in place a voluntary code to articulate how contracts and supply agreements should exist. ‘We are aware that some growers have very poor relationships with growers and don’t necessarily operate by the rules, but we do hope to achieve a level of uniformity around the dispute resolution process and price offers’, he says. ‘We acknowledge the legitimate concerns of growers, but believe that the less regulation, the better. Furthermore, the issue of whether or not there should be a peak grower body separate from the winemaking body is an issue best left to the industry, not the government.’ The irony, says Strachan, about the entire Senate process is that it has been largely driven by the industry representatives of warm climate fruit growers. He says that wine exports are still increasing at around 14% per annum by volume, which is largely being supplied by the excess of warm climate fruit, an excess that is relatively small when compared to that of cool climate fruit. Fruit from cool climates is now being incorporated into essentially warm climate brands, which in itself is delaying the recovering of the demand and supply balance for warm climate grapes.
