Government Intervention in Wine Production

October 24, 2019Media , Wine Merchants

Do you want the government controlling your business dealings?

Stemming from an 18-month investigation, the ACCC has now published their findings into quality & payment issues regarding grape and wine producers.

 

Wine Making & Testing Methods

There is a recommendation that all winemakers must follow the same methods for testing and sampling their grapes and wine during production. In my opinion this may destroy the competitive advantage gained by wine makers, from hours of tasting and years of experience.

 

Payment Terms

We are seeing a push from government to ensure suppliers or producers are paid on time. This is something that we all support. Going a step further, there is a push to regulate the production & negotiation of the supply chain which would have dire consequences.

What happens when the ACCC gets involved?

We see multiple examples of what happens when the regulators sink their teeth into an industry. Aside from key social infrastructure industries such as energy, health and telecommunications, there are major issues with the increased regulation of non-critical sectors.

Competition disappears, oligopolies form, general product/service quality decreases and pricing sky-rockets.

The regulator has suggested that the voluntary code of conduct should be “substantially strengthened” and has suggested that growers & winemakers sign onto the new code of conduct, or “a mandatory code would be introduced”.

 

What do you think?

I would love to get feedback from industry participants at all levels to continue this conversation.

You can contact me through email at [email protected]

This article was written by Tim Demetriou. 

Tim Demetriou is the CEO of Pencil, a predictive trade credit platform that manages Producer to Wholesaler to Distributer to Retailer trade credit relationships.