MPs call for probe into supermarkets' private-label wines

A parliamentary committee has called for an investigation into whether supermarkets Coles and Woolworths are lining their shelves with private-label wines, squeezing out traditional winemakers.

Last week a report from the House agriculture committee raised concerns about the dominance of private-label wines and the impact on competition.

Chaired by Tasmanian MP Dick Adams, the committee pointed to the topic as part of a wider inquiry into the operations of industry body Wine Australia.

Wine Australia chief operating officer Andreas Clark told the committee: "I think the producer would argue that it is a challenging market for them ... trying to get their product into the market with heavy dominance by the two major retailers, and their preparedness to invest heavily in their own brands, which compete on the shelves with the traditional brands, as we call them."

"So, the producers will say they are getting squeezed, and then that follows down the chain."

Private-label wines have been a bugbear for the wine industry. Many wines sourced by Coles or Woolworths receive pride of place on their shelves. To consumers they look like traditional brands and some have scored wine awards.

Last year, Ross Brown, the former boss of Brown Brothers winery, criticised Coles and Woolworths for flooding stores with private-label wines that he said were "hollow", "copycats" and "masquerading as real brands".

Later he said, "in fact they are just a label, which has none of these values that traditional family wine companies bring to the market and really give the aspiration and values to what quality wine is all about".

Mr Adams said evidence needed to be gathered to clarify whether private-label wines were displacing wines from traditional winemakers. But he stopped short of saying he would ask the competition regulator to investigate.

He said he hoped the next Parliament would inquire further.

Australian Competition and Consumer Commission head Rod Sims in February referred to the threat posed by private-label foods, saying he would investigate the supermarkets for potential breaches of the law and bullying tactics against grocery suppliers.

An allegation raised consistently with the ACCC by suppliers was conduct discriminating in favour of house-brand products by the chains, Mr Sims said.

Woolworths has argued that only about 4 per cent of wines it stocks are private label while Coles said its proportion of own-brand wines had remained stable, with consumers deciding what they wanted.