Steve Burnett, The Grape Exhange, looks into the dynamics of the spot market.

Let us start by going back a few years. If you were a grower who either produced with the intention of selling all, or part of, your crop, it was generally accepted that the best deals were long term contracts. These would often lock you in at a price for a pre-determined period of time. Great some years, deeply frustrating in others. For those who weren’t locked into long term contracts, spot market trading often consisted of talking to the folk who bought the fruit last year and a handshake would secure the same deal again. Fundamentally, the market regularly stagnated.

The market has moved on a bit from then and has become more sophisticated (in a good way). There are now platforms, such as The Grape Exchange, available to trade fruit and wine and these platforms have brought greater transparency to the pricing fluctuations in the last few years, allowing a more dynamic response.

The aforementioned fluctuations in the marketplace don’t necessarily represent inherent instability – rather, it’s a reflection of a simple case of supply and demand. The spot market provides a fair representation of what fruit is actually worth in a given year. Importantly, it is worth noting that prices often become far more unstable late in the season, often reflecting oversupply or disease pressure.

 The late frosts from this season have put the cat amongst the pigeons. It is entirely possible that such factors cause an increase in market rates, resetting them to pre-2023 levels, since when, the market has seen a gradual decline in the value of fruit being sold.

 The four main pieces of advice I always provide clients are:

  • Try and get a deal in place as early as you can reasonably do so. There is nothing worse than a mad panic at the last moment to try and secure a sale! But, at any stage of the season, be prepared to negotiate.
  • If you are buying, obtain as much information as possible on the particulars of the fruit, the grower and their viticultural practices and philosophy.
  • Equally, when selling, be prepared to provide as much information as possible. So often, it’s the minutiae of the detail that pushes a deal over the line.
  • Handshakes don’t tend to cut it any more. Make sure that you get legally binding contracts in place. This is often best placed in the hands of a third party broker.
  • Make sure that you understand all of the particulars included in a contract. This should include often overlooked details such as:
    – Who is responsible for transport?
    – Who is responsible for picking vessels?
    – Does the buyer require samples?
    – How does the grower deal with SWD?

Given the increasing complexity of spot market transactions, many growers and buyers now see professional brokerage support as an important safeguard rather than an optional extra. Essentially, would instructing a broker to handle all of this be best for you?


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