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Australian wine companies to gain better protection with joint agreement with Woolworths

Published:  13 August, 2014

Australian wine producers are set to gain better protection with the signing of the "Good Wine Buyer and Suppler Principles: A Code of Fairness and Transparency'' with Australia's biggest wine retailer Woolworths Liquor Group (WLG).

The officially signed agreement which has been in negotiations for more than 12 months was signed by Woolworths and The Winemakers' Federation of Australia (WFA), which represents over 2,500 wine companies, all of Australia's winemakers, and its 380 members, which make up 90% of the industry by value.

The agreement is a voluntary and outlines standards for behaviours and business practices in regard to retail market practices.

Several key elements to the agreement cover areas including clarity in marketing and promotional activity; open, honest and early communication; respect each other's rights to set retail and wholesale prices; the outline of a clear process for listing and delisting products; the protection of Intellectual Property and a process to resolve disputes.

Tony D'Aloisio, the president of The Winemakers' Federation of Australia,said: "The Principles will be welcomed across the industry as they will provide more transparency, certainty and fairness for negotiations and agreements. We welcome the progress we have made with WLG on the key issues and the constructive way they have responded to the issues raised by our members regarding retail market practices. We look forward to improving and adding to the Principles for the benefit of our members and their commercial relationship with WLG in the future."

Paul Evans, WFA's  chief executive , acknowledged although it is an important step for the Australian wine industry, which has suffered the past few years due to over supply and a strong currency resulting in an unfavourable exchange rate, it won't be a quick fix.

"It's an important step, but it is only a step and it's not a silver bullet,'' said Evans.

The principles adopted by WLG will be applied to all suppliers that they do business with, not just WFA members. The WFA first approached Woolworths because the supermarket retailer with its BWS and Dan Murphy's stores is the biggest wine retailer in the market.  

The WFA is now setting its sights on Cole's, another large retailer in Australia, in the hopes of striking a similar deal.

* Harpers Wine & Spirit has been working on a similar scheme with suppliers to the independent merchant sector. The voluntary Best Practice Guidelines set out a series of guidelines that suppliers can sign up to that pledge standards of service and transparency in trading arrangements with independent merchants. You can find out more details about how that scheme works in our Best Practice Guidelines section.

The Winemakers' Federation of Australia

The Winemakers' Federation of Australia signed a landmark deal with Woolworths to help better protect wine producers that do business with the supermarket giant.