Grange on hold as Penfolds workers strike for pay rise

Wine makers of some of Australia's premium brands, including Penfolds Grange, have walked off the job demanding a cost-of-living wage increase.

A total of 125 workers began a 24-hour strike on Wednesday morning at two Treasury Wines Estates sites in South Australia's Barossa Valley, home to the company's flagship Penfolds, Wolf Blass and Grange Hermitage labels.

The United Workers Union (UWU) is pursuing a 14 per cent pay rise over three years, including five per cent in the first two years and four per cent in the third.

Treasury's offer of 11.5 per cent has been rejected by the union as inadequate, considering workers agreed to a pay freeze during the pandemic.

Under the previous agreement, wages increased 5.5 per cent over three years, while inflation hit a peak of 7.8 per cent per year.

"Treasury Wines executives might think nothing of sampling a $800 bottle of Grange but workers are in the grips of a cost-of-living crisis and finding it hard to put food on the table," UWU national secretary Tim Kennedy said.

In a letter to Treasury's major institutional shareholders, Mr Kennedy warned strike action could impact the company's premium wine inventories if management did not present an acceptable offer to workers ahead of peak production season.

"This presents a potential risk to TWE’s strategy of ‘investing in inventory’ which TWE have described as ‘a key pillar of TWE’s premiumisation strategy, driving earnings growth, margin accretion and improved ROCE across multiple years'," he wrote to investor HostPlus.

Shareholders delivered a "first strike" against Treasury's board at the company's annual general meeting in October in a major protest against management salaries.

Chief executive Tim Ford was awarded a $2.5 million bonus nonetheless, a "bitter pill" for workers to swallow after their wage freeze, Mr Kennedy said.

The union is also calling for improved leave arrangements for workers and better conditions for labour hire workers.

Treasury is facing an unfair dismissal suit brought on by former labour hire workers who were abruptly terminated after company-mandated medical examinations.

Former winemaker Ben Fabio said he lost his income and his self-esteem when he was told he was medically unfit to work, despite being a marathon runner and long-distance cyclist.

"I was completely shattered," he said.

"My wife had been made redundant and she was caring for a family member with mental health issues at the time, so it was really hard."

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