Australian winemaker Wolf Blass is fighting to close a tax loophole allowing New Zealand competitors to claim millions each year in wine tax rebates from Australia.
Australia’s Wine Equalization tax rebate was originally set up to support smaller domestic producers allowing winemakers to claim back up to $500,000, based on the wholesale price of their wine.
However a trade treaty has enabled New Zealand wine producers to also access the rebate NZ competitors to claim around AUD$25 million (£13.7m) in annual rebates off Australia, while also representing New Zealand’s largest export market.
Speaking to Laura Poole of the Australian Broadcasting Corporation (ABC), Blass said: “The competitor, New Zealand, they have flooded our market now with 16% and we have a 25% surplus, you don’t have to be Einstein to see that something has to be done.”
“16% from one country is not acceptable and we are supporting their country which is just ridiculous,” he said.
The Wolf Blass foundation is now funding a study on the legality of axing the rebate for New Zealand.
Blass highlighted the reasoning behind the study: “This project now, tackling a(sic) issue with the Wine Equalisation Tax (WET), is probably the most important issue we have ever tackled.”
As to why, Blass replied: “For the simple reasons, the wine industry is in diabolical trouble, the grape growers and winemakers are in big trouble, we got a 25% surplus.”
The Wine Equalisation Tax is a value based tax on wine consumed in Australia set at 29% of the wholesale value but wineries can claim a rebate of up to $AUD500,000 (£277,000), originally set up support smaller domestic producers, but it is currently estimated at least $AUD25 million (£13,859,000) worth of rebates are being claimed by New Zealand through free trade provisions.
As for what Australia should do with the money, Blass had a suggestion: “We need to be able to promote Australian wine in the US, Canada and in Europe to sell our excess which is sitting here and destroying the industry structure morally, physically and financially.”
As reported in the drinks business Wolf Blass has a track record in these markets.
The support from the rebates help smaller operators run their businesses and turn a profit, but Blass made assurances they were not the target even though he has form in attacking smaller Australian producers.
“We are only interested in tackling New Zealand, we are only interested at this point in time in tackling New Zealand,” he said.