SOME OF Griffith’s longest standing family-owned wineries could be brought to their knees if supermarkets continue to monopolise the market with cheap, home-brand wines, local company heads have warned.
Supermarket giants Coles and Woolworths have been accused of creating “market distortion” after introducing their own brands of cheap, mass-produced wine, to the detriment of existing wineries already floundering in an embattled industry.
The supermarkets have previously come under fire for cripplingly low prices paid to primary producers including milk and citrus.
Now local winery heads have taken aim over “look-alike” wine brands.
De Bortoli Wines managing director Darren De Bortoli said in his view, the two supermarkets held market dominance so large it created market distortion.
“It’s working against the wineries and grape growers of this region,” Mr De Bortoli said.
“The legislation is the first thing that needs to be looked at.”
Mr De Bortoli said the ACCC would investigate whether supermarket wine offers, coupled with petrol discounts, were fair, but questioned whether that was enough.
With the two giants now accounting for two thirds of wine sales in Australia, McWilliam’s Wines head Doug McWilliam said supermarkets stood to gain a significant profit margin by creating their own brands.
“They’ve created look-alikes with similar packaging and bottles to exisisting labels so they’re trading off someone else’s brand and reputation,” Mr McWilliam said.
“Because of the heavy discount and the fact they will only buy at a certain price, this has effectively transferred all profits to the supermarkets because of the margins they’re demanding.”
Mr McWilliam said the situation had been made possible by the vast oversupply of grapes and surplus wine in Australia.
“Because of the oversupply of wine in the marketplace, it has fallen into the hands of the big buyers, who have been able to create all their own brands,” he said.
“This means they are directly competing with traditional wine makers.”
Mr McWilliam said one of the only solutions was to “pull grapes out”.
“We have to remove some of the producers, there are too many,” he said.
“Supermarkets are merely taking advantage of the situation.”
Mr McWilliam said the realities of the oversupply could see some of the established wineries forced out of business.
The Area News contacted Woolworths, but at the time of printing had not received a response.