Labour, Compliance & the Cost of Doing Business
South Australia’s wine industry is entering Aussie Wine Month under intense regulatory scrutiny, with labour practices now firmly in the spotlight.
In early April, the Australian Taxation Office (ATO), Fair Work Ombudsman (FWO) and Australian Border Force (ABF) conducted coordinated, unannounced inspections at 18 vineyards across the Barossa Valley, Adelaide Hills and McLaren Vale as part of Operation Zephyr, a national crackdown on unlawful labour‑hire practices.
These inspections targeted vineyard owners and labour‑hire providers and focused on a wide range of potential breaches, including underpayment of wages and entitlements, superannuation non‑compliance, PAYG withholding failures, non‑lodgement of tax returns and activity statements, inaccurate business reporting, and breaches of the Migration Act relating to migrant worker exploitation. Officers from all three agencies interviewed workers and managers on‑site and requested detailed records such as contracts, invoices, timesheets, pay slips and rosters. Investigations remain ongoing. Australian Taxation Office Regulators have been explicit about the seriousness of the issue.
ATO Assistant Commissioner Tony Goding noted that unlawful labour practices “erode trust in the viticulture industry” and emphasised that vineyard owners are accountable for the conduct of the labour‑hire providers they engage. He warned that if labour costs appear “impossibly cheap,” there is usually a reason and it is rarely legal.
Industry bodies have echoed this concern.
Australian Grape & Wine CEO Lee McLean stated that compliance with workplace, taxation and migration laws is “fundamental to maintaining trust across the industry,” while the South Australian Wine Industry Association (SAWIA) has reminded members of their obligations and the importance of operating with integrity.
This heightened enforcement activity comes at a time when many wineries and vineyard owners are already grappling with rising operating costs, labour shortages, and tightening margins. Seasonal labour is essential to vineyard operations, yet the regulatory environment around workforce management has become more complex and more heavily policed. For vineyard owners, the message is clear: compliance is no longer a back‑office function, it is a frontline business risk.
The implications extend beyond payroll.
Poor governance in labour‑hire arrangements can expose wineries to tax penalties, reputational damage, operational disruption and, in severe cases, criminal liability. With regulators signalling “zero tolerance” for deliberate non‑compliance, the cost of getting it wrong is rising sharply.
For the South Australian Wine Industry, this moment represents both a challenge and an opportunity. Strengthening payroll systems, tightening contractor oversight, ensuring accurate tax reporting, and embedding robust governance frameworks are now essential steps in protecting the business and supporting long‑term sustainability.
Aussie Wine Month is a celebration but it is also a reminder that excellence in the vineyard must be matched by excellence in business practice. In an environment where regulators are active and expectations are rising, strong financial governance is not optional; it is a competitive advantage.
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Adam Wright, Director, Accounting & Business Advisory Head of Wine, Hood Sweeney
Our team works closely with wineries across the Barossa, McLaren Vale, Clare, Coonawarra and the Adelaide Hills, supporting owners and operators as they manage the financial, structural and regulatory pressures shaping the industry.
If you’re reviewing your labour‑hire arrangements, strengthening your compliance settings, or planning for the next phase of your business, we’d welcome a conversation about how we can support your winery.