CAPE TOWN — The Wine Council of SA is set to crack down on commercial “tie-ups” between large wine producers who provide “incentives” to retail outlets and restaurants to list their wines, the council's chairman, Kader Asmal, said yesterday.
Asmal said he had received a complaint about such “unethical commercial practices” and that the council had discussed this at its meeting yesterday.
He said the council would be holding a workshop next year to highlight the issue where producers, most of them large ones, misused their dominant power position to provide monetary or other incentives to dominate the wine lists of restaurants and even, in some cases, dictate prices.
Asmal said these arrangements were illegal and “inconsistent with free competition”.
He said that if it was found that SA's competition legislation or corruption legislation was insufficient to deal with the matter, the council could move to strengthen legislation to eradicate such practices.
Having been alerted to the fact that incentives were given to list wines from large producers, to the detriment of small producers, the council had committed itself to hold a workshop.
“Here the full extent of the situation will be researched,” said Asmal.
“If there is unfair competition in fixing of prices or controlling a dominant position in supermarkets, then the law of the land must apply,” said Asmal.
Citing the example of Tiger Brands, which was fined R98m fine for the “uncompetitive” fixing of the bread price, he said the council had a responsibility to ensure that the wine industry subscribed to ethical business practices.
“The insertion of ethics is the difference between the wine industry and Tiger Brands,” said Asmal.
He agreed that people were scared of publicly highlighting the problem because they feared victimisation. He said, therefore, submissions on the issue could be made to him without any names being mentioned, or they could be made in the open.
Asmal said there was nothing untoward in the council seeking a new CEO to replace Johan van Rooyen, the incumbent.
He said the intention was to appoint the person best suited to meet the requirements of transformation in the industry.
Source: Business Day
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