By Andy Young

In a letter to the editor of the Australian Financial Review, the chief winemaker for McGuigan Wines, Neil McGuigan has said that volumetric wine tax will destroy jobs in wine regions.

In the letter McGuigan said that Wine Equalisation tax reforms are supported by the wine industry and would have "addressed issues and allowed measured change."

He added: "Volumetric tax, on the other hand, will increase the price of wine most people drink, devastate employment and hamper export competitiveness, while making expensive wine a little cheaper.

"Volumetric tax – at the rate of full-strength beer – will increase wine. A $13 cask of wine will increase to more than $32, a 426 per cent increase on a product consumed mainly by older people on fixed incomes.

He also wrote: "Price rises for people on constrained budgets will dry up sales, affecting hundreds of grape growers and destroying jobs in regions. It's spurious logic to suggest higher premium prices will benefit the industry. 

"The erosion of economies of scale will diminish export competitiveness when the industry is already struggling."

Nick Greiner, chairman of Accolade Wines also wrote to the Financial Review's editor, agreeing with many of the points made by McGuigan. Greiner added: "You'd be pushed to come up with a system less simple and more unfair, with more devastating consequences for the wine industry."

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The Shout Team

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

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