Media Release – 2nd December 2016
The Federal Government has today announced significant reforms to the Wine Equalisation Tax scheme.
Kingston Estate Wines Managing Director, Mr Bill Moularadellis, said ‘These long awaited reforms are welcomed and are a win for all sectors of the industry especially for independent growers who do not make and sell bulk wine.’
Mr Moularadellis specifically applauded the extensive consultation and work by Senator Ruston and her team over a very long period of time to achieve these sensible reforms.
Mr Moularadellis said ‘the phasing out of the 29% WET subsidy on bulk wine from 1 July 2018 will result in a material increase in wine grape prices from the 2019 vintage.’
‘Large winemakers will now be motivated to purchase grapes at higher and more sustainable prices, rather than rely in part on bulk wine that had been subsidised by the tax payer at 29% of the combined grape and processing cost‘ explained Mr Moularadellis.
‘This bulk wine subsidy, which has been in operation for a very long time, has been a debilitating influence on our industry. It has significantly delayed the industry’s recovery and can largely be held responsible for the industry’s failure to respond to the oversupply and fully develop our export potential.’
‘The continuation of the rebate on packaged wine in its current form will provide domestic retailers and consumers with a significant cost advantage. A real opportunity remains for the future however, to provide a tax policy setting that encourages exports rather than the existing policy which continues to provide a significant motivation and advantage for smaller producers to sell locally via a 29% tax rebate on wholesale packaged wine sales’ said Mr Moularadellis.