Covering the Goulburn and Murray valleys

Wine industry relief after no increase in tax

Wine industry representatives are relieved wine taxes have not increased in the Federal Budget.

BARBARA SUNGAILA May 21, 2014 7:45am

Wine taxes have not been increased.

Wine industry representatives are relieved wine taxes have not increased in the Federal Budget.
Heathcote Winegrowers Association president Phil Meehan said winemakers already paid a wine equalisation tax of 29 per cent.
‘‘Very few fully understand just how the system works, however, suffice it to say smaller wineries do get a rebate of this tax,’’ he said.
The 2010 Henry Report recommended replacing the WET with a volumetric tax.
Mr Meehan said this would be disastrous for the Australian wine industry.
‘‘Replacing this taxation basis with a volumetric tax would probably mean over 90 per cent of Australian wineries would find their products too expensive in the marketplace and consequently their businesses unviable,’’ he said.
Winemakers Federation of Australia chief executive Paul Evans said there would be a collective sigh of relief from winemakers across regional Australia in response to the budget decision on wine taxes.
‘‘The Australian wine industry supports over 30,000 jobs and earns over $1.8 billion in export revenue, but high exchange rates, a consolidated retail sector and a high cost base have all placed significant hurdles in front of local producers,’’ he said. 
‘‘A recent industry review revealed very low average levels of profitability across the wine sector and many cases of local businesses operating below cost despite the fact we produce a truly globally competitive product.’’
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