Australian Wine Industry and Pinstripe Suits

Ned K.

The Weekend Australian Easter edition in the Business Review contained a revealing article about the deceptive marketing ploys of multinational owned wineries in Australia.

Many of the well-known wine brands such as Hardy’s, Grant Burge and Jacobs Creek still carry their historic brand names of the families that started wineries as local capitalists as far back as the mid-1800s. The article in the Australian noted that behind these brand names lie multinational corporations and overseas owned private equity companies. Grant Burge - owned by Accolade Wines; Hardy’s and Berri Estate - owned by US owned Treasury Wine Estate; Jacob's Creek - owned by French multinational Pernod Ricard. Even the famous Penfolds Grange brand is owned by a multinational corporation - Treasury Wine Estate. These corporations also own big vineyards and in some cases such as Woolworths' owned Cellarmasters and Vinpac the wine distribution networks as well.

As the article in the Australian says:  "You couldn't get more different than private equity and family ownership, but of course brands like Hardy’s, Grant Burge and the others prefer to have old time black and white pictures of families in front of 19th century homesteads on their marketing paraphernalia than images of merchant bankers in pinstripe suits."

It is the multinationals in the wine industry that are leading the charge to reduce penalty rates and expand the span of ordinary hours of all wine industry workers from the vineyards through to the meet and greet cellar door sales staff. They are using the "award review" process under Fair Work Commission to do this.

Resistance from National Capitalists

There are still some Australian owned wineries of considerable size that are holding out and speaking up against the invasion of Australia's wine regions by the multinationals. Yalumba in the Barossa Valley in SA, owned by the Hill Smith family for generation, is leading a backlash from Australian family owned wineries against the multinationals presenting as family owned businesses. Robert Hill Smith, the current managing director of Yalumba says pointedly:  "We should all work to end this advertising folly being foisted on the unsuspecting by the board rooms of multinationals."

Hill Smith stays one short of condemning the export of profits by multinationals to the pinstripe suit brigades of New York, Paris or London (or in the near future Beijing?) but the very fact that he has gone public on this issue indicates that even large Australian owned wineries are struggling to survive the multinationals’ voracious appetite for market control of the key wine industry regions of Australia.

What about the Wine Industry Workers?

The multinational owned wineries are no friend of the worker nor local communities. Profit maximization is their aim behind the facade of presenting as still a local family owned business. Hence Accolade closed the original Hardy’s winery at Reynella, south of Adelaide, putting hundreds out of work. Pernod Ricard closed bottling plants and shipped bulk wine in huge bladders to be bottled overseas, putting hundreds out of work. Their workers still receive relatively high wages compared to workers in the same regions in small wineries. However this is not through the goodwill of the multinationals but rather a reflection of the collective strength of the workers and the huge surplus value produced by each worker. The higher wages of existing workers in the multinational owned wineries are "subsidised" by the loss of jobs in plants they deem "economically unviable" and by screwing down the price for grapes from local grape growers. 

You might say, "But what about companies like Yalumba? They exploit their workers for profit too don't they?" Yes they do although the wages and conditions in the larger locally owned wineries like Yalumba are on a par with those of the multinationals even though the surplus value generated by the likes of Yalumba workers is probably less.

An Opportunity for Shorten - Will He Seize the Time?

The current situation does gives rise to the possibility of a temporary identity of interests between wine industry workers, local communities and some of the decreasing number of large privately owned wineries.

If Bill Shorten was genuine about his recent branding of the Turnbull Government as the party of the multinationals and trying to use this as a point of difference for swinging voters, he could do no worse than visit places like Yalumba, talk to the owners and workers and come up with a policy of determination to take back the wine industry in to the hands of the local communities who produce the product!