NZ Winegrowers is your nose growing?

12 July 2010.

It was released in the press that the New Zealand Winegrowers had been told off by the Commerce Commission for telling its members to limit the amount of grapes they harvested.
The commission investigated after receiving three complaints about New Zealand Winegrowers’ conduct during the 2010 harvest.

Apparently the Commission were concerned that the industry group had gone beyond making recommendations about volumes of grapes that were to be harvested and that they had effectively directed growers to harvest only set amounts.

It turns out that this would have been illegal and the Commerce Commission were therefore concerned. They went so far as to issue compliance advice to the New Zealand Winegrowers, which some assumed to be an indication that they had been guilty. However, New Zealand Winegrowers chairman Stuart Smith said he believed the commission’s statement cleared the group of any wrongdoing.

Additionally, Belly Gully (eminent Lawyers that act for the New Zealand Winegrowers) Proudly report on their web site that they have “Acted for New Zealand Winegrowers in relation to the Commerce Commission's investigation into the conduct of New Zealand Winegrowers, as the industry body, regarding grape harvest and wine production levels. The Commission concluded there was no breach.”

This seemed like a bit of an incongruous thing to do. One side (the Commission) says “Bad Winegrowers. Don’t tell growers what to produce.” and then the other side (Winegrowers) says “Good news! The Commission have cleared us of any wrongdoing”.

I for one was confused.

It got better.

15 July 2010:

It was released in the press that The Commerce Commission is offering an amnesty for wine growers (the people who ACTUALLY grow grapes) who own up to colluding over grape prices and harvest yields.

The commission sent New Zealand Winegrowers a letter after an investigation into complaints about the way the group advised members to restrict harvests to meet production targets for the 2010 vintage.

The commission noted it did not have evidence that individual members of New Zealand Winegrowers were setting prices or targets independently of the organisation, but offered immunity from prosecution to the first person to come forward and reveal examples of it happening.

At this point it looks like the Commerce Commission were dredging up a case of sour grapes (everyone loves a pun). I mean what’s going on with the Commerce Commission? Accuse a National body of an illegal act and then offer amnesty for any growers that come forward to confirm it? Frankly it smelled like a fishing trip.

Like any good tale there’s a twist.

Fade back in time……..

5 October 2009:

It was reported in the NZ Herald that “New Zealand Winegrowers has for the first time told wine producers how much fruit to harvest, in an effort to address the oversupply problem. Growers have been told they should harvest no more than 8 tonnes a hectare in the 2010 season. This compares with about 10 tonnes a hectare in the past couple of years.”

The article reports several facets of the reasons why this seemed like a good idea. But I’m pretty sure that the headline for the article sums it up succinctly;

“Winegrowers body sets harvest limits”

So here’s the corrected timeline;

October 2009: NZ Winegrowers appears to direct growers to limit their harvest.

July 2010: NZ Commerce Commission reports that NZ Winegrowers have breached some legal point by telling the growers to harvest a set amount.

July 2010: NZ Winegrowers claim that there was no limit imposed and that (in the words of Stuart Smith) “I do not know why complaints had been made to the commission about the association. Growers had come to the association for guidance after the 2008 harvest created an over-supply of grapes which had damaged the market”

DANGER SPIN ALERT!!

We didn’t tell the growers how much to harvest (like was reported in the press). We just gave them advice when they came to us with a problem.

I think that the smell that the Commerce Commission has picked up is not so much a delicate bouquet that tickles the nose, but a ripe, festering pong that assaults the senses