WOOLWORTHS has inflamed the issue of its push into house-brand wines.
Woolworths chief executive Michael Luscombe was this week quoted as saying winemakers should have predicted oversupply would hasten growth in house-brand wines.
"Don't point the finger at the retailer," he reportedly said. "You need to search your own backyard to understand why you made the decisions."
Winegrape Growers Australia executive director Mark McKenzie described Mr Luscombe's comments as "arrogant".
He said two factors had contributed to oversupply in Australia - a change in export circumstances and managed investment scheme plantings.
"Senseless discounting destroys brands but they (supermarkets) don't care if they destroy existing brands. They will replace them with their own brand," Mr McKenzie said.
Supermarkets have been criticised for forcing suppliers to undercut their own brands by supplying house brands.
NSW University competition and consumer law expert Frank Zumbo said the supermarkets' push into home-brand wines would reduce competition.
"If they succeed in getting rid of branded products there's nothing stopping them raising prices on home brands," he said.
"They're using home brands as a trojan horse to remove the competition."
Woolworths owns Dan Murphys, BWS bottle shops, Woolworths liquor and the ALH chain of hotels while Coles owns First Choice liquor, Coles Liquor and hotels.
A Woolworths spokesman said Woolworths had worked with the wine industry through the glut and that house brands were here to stay.
Meanwhile, in New Zealand, supermarkets are buying wineries.
