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ACCC to investigate wine grape price gouging

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Following a request by Murray Valley Winegrowers, the Australian Competition and Consumer Commission will be investigating a winery in the region for alleged price gouging.

Last year the winery in question had contracted $240 per tonne for chardonnay grapes and has since gone back on its word by now only offering $150 per tonne.

The group which represents growers in the Riverina and Riverland regions have now decided to withdraw its support of the wine industry’s voluntary code of conduct – sighting that the code had failed to protect growers, theWeekly Times Now reports.

Murray Valley Winegrowers chairman, Brian Englefield is calling for both a mandatory code of conduct and government support to help struggling growers.

"We're unlikely to achieve significant change in wine grape prices for this year," said Englefield

"But a lot of growers won't make it to the 2015 vintage.

"We want regulation to force the wineries to sit across the table from us and negotiate."

Mark McKenzie, executive officer of the growers group said that major players such as Accolade, Pernod Ricard and Treasury Wine Estates were using their market power to manipulate prices that are have been at cost of production, or below for the past five years.

"We have a feeding frenzy going on at $150 or even less for chardonnay," said McKenzie.

"And there are at least two other wineries following suit. In real terms, prices are probably back 40 years.

“It's unconscionable. It's price gouging."

"Treasury Wines has not only set the market in league with Accolade and Pernod Ricard, but they're now undercutting their own position in a tailspin of trying to pick up cheap wine grapes," he said.

Image: www.whitewines.net

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