By Andrew Starke

The Supporting Australian Wine industry group today (Sep 26) called for a rational approach to industry restructure that is inclusive rather than exclusive.

This group includes major industry players Australian Vintage, Accolade Wines and Casella Wines, and is supported by the Winemakers Federation of Australia (WFA) medium and small Winemakers committees, the Murray Valley WineGrowers Council and other grower and worker groups.

The Winemakers Federation of Australia’s medium sized forum includes family wine companies such as McWilliams Wines, Tyrrells Vineyards, Yalumba, Taylors Wines, Brown Brothers and Tahbilk Wines.

All believe that a change from an advalorem to volumetric tax will be devastating to the Australian Wine Industry and the regional economies spread right across Australia which rely on the industry for their survival.

The group is making a submission to the forthcoming tax forum in support of the status quo on wine tax.

Casella Wines managing director, John Casella, said that proposals to switch tax formats and remove the Wine Equalisation Tax (WET) Rebate would cause the closure of dozens of regional wineries, forcing job losses and, ultimately, the forced sale of family vineyards.

“The WET rebate needs to be reviewed to close loop holes, but it should not be abolished because it is doing its job,” he said.

“It is supporting small winemakers and supporting diversity in the wine industry.

“The proposal to remove the WET rebate will impact on the diversity of the wine industry, a key strength of the industry, and also impact regional economies which rely on the jobs created by small wineries and the tourist business they draw to regions.”

Australian Vintage chief executive, Neil McGuigan, said the switch to a volumetric tax would effectively increase the cost of accessible mainstream wines while reducing the cost of high-end premium wines.

“It’s interesting logic, to push a scheme that puts up the cost of mainstream wines, that most consumers buy – allegedly as a means of reducing an industry oversupply situation,” McGuigan said.

“Under a volumetric tax we will certainly change the Australian wine industry, but in a negative way that will see regional winemakers going broke, regional jobs and family vineyards disappearing and more Australian wine being sold at unsustainable prices into international markets as companies struggle to survive.”

He said Victorian Department of Primary Industry figures showed that in the Murray Valley and Swan Hill region the grape crush was down 20 percent in 2011 compared to the previous season.

Accolade Wines Chief Executive Troy Christensen said Australia’s wine industry was already facing significant challenges, including access to water, climate change, imported surplus wine and the unprecedented strength of the Australian dollar.

“The industry is facing its challenges and for a real industry solution it needs to work together,” he said.

“Supporting Australian Wine is calling for the retention of the status quo in wine taxation for the sake of jobs, Australia’s wine industry and our regional communities.

“We believe if the WET rebate is being rorted it should be tackled through the appropriate channels, via a tax office crackdown, rather than turning the industry on its head.”


The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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