The Australian Government should investigate the feasibility of distilling excess wine into industrial alcohol – or otherwise “disposing of a portion of Australia’s wine surplus”.
It is one of the recommendations of a final report by the Rural and Regional Affairs and Transport References Committee.
The Senate Inquiry was established to look into the adequacy of the voluntary Code of Conduct for Australian winegrape purchases.
The report recommends that a mandatory Code of Conduct across all wine regions be implemented by the Australian Competition and Consumer Commission (ACCC).
The committee also recommends that payment terms for winegrapes be limited to within the financial year of delivery at the latest.
Other recommendations include that:
• Wine Australia continues to facilitate and enhance the collection and dissemination of wine and grape information and data that it publishes, for the benefit of wine and grape growing sectors.
• The Australian Government, in consultation with Australian Grape and Wine, investigates potential support packages to aid growers in transitioning out of winegrapes and into other crops or land uses in the warm inland wine regions.
• Australian Grape & Wine provides an updated Pre-Budget Submission reflecting the current status of the Australian wine industry.
• On the basis of the above submission, the Department of Agriculture, Fisheries and Forestry invests in Australia’s wine market through the establishment of new trading partners, expansion of existing markets and promotion of wineries and cellar doors domestically.
The report says that grapegrowers expressed the “anxiety and insecurity” felt due to the lengthy payment terms that are common in the industry.
“While grapes are delivered shortly after harvest, it is common for payment schedules from wineries to run over eight months after delivery.
“Lengthy payment terms leave growers in a position as ‘unsecured creditors’ and make it difficult to financially plan for the coming year.”
The report says that to reduce the stock-to-supply ratio over the long term it may be necessary for some growers to exit the industry.
“The committee heard that there are alternate crops and land uses that would be ideal for grapegrowers to divert to, or complementary crops that growers can establish alongside their grapes in order to diversify their product,” the report says.
“Many growers are willing to make a change but lack the information, data, or financial capital necessary to exit the industry and start afresh.
“The committee believes there is a role for government in assisting and supporting growers to make this transition.”
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