No. 146

Shock Horror – The End of Free Wine Tasting in NSW

There’s no such thing as a free wine-tasting

STONE the crows! It’s enough to  drive a bird to drink.

There was a corker of a warning last week from Hunter Valley wine makers threatened by a New South Wales Treasury plan. That blighter Bruce Baird is scrapping the $3.5milion subsidy paid to 22 wineries that sell at the cellar door. This is a very bad move they say, which (what a surprise!) will stop investment and cost jobs.[i]

Perhaps it was a quiet news day at the Herald, or perhaps the industry was gearing up for another go at Macquarie Street, because the scheme ended in June.[ii]

Inevitably, industry protection schemes being what they are and this is all as silly as it looks, it is a great deal more complicated. The GST covers cellar door sales. But, because they were exempt under NSW tax, the Howard Government agreed to fund the state to subsidise wine makers for the tax. [iii] In 2004, the Commonwealth also established a rebate scheme set up to assist small growers, which includes treating cellar door sales as own use. But, here’s another surprise, the industry attempted to rort it.[iv]

The NSW government now saysit is time for the 15 per cent rebate to go because it was “designed to assist NSW winemakers in the transition to the Commonwealth tax scheme”.

Surely not the scheme which discounts the tax that small producers pay for no better reason than they struggle to make a quid, and which smarties seek to evade. Unless it is the GST, which is hardly new.

But of course tax itself is not the issue; it is all about propping up an industry struggling to produce products at prices people, especially overseas, will pay. According to Tourism Hunter’s Will Creedon: “With the glut of wine over the last number of years throughout the world, [winemakers] have depended heavily and virtually on this subsidy.”

The end of the subsidy, he warns in admirable understatement, is “a death knell in the coffin”.[v]  He did indeed say this.

And that’s not the worst of it. According to wine maker Bruce Tyrrell, with the subsidy gone, “You won’t be able to walk into a place and taste semillions (sic) from the current vintage to 1999 that have trophies and gold medals. You won’t be able to do that for free.” [vi]

Heaven forfend that anybody argue there is no such thing as a free wine tasting.

ENDNOTES


[i] Joe Casamento and Heath Aston, “Hunter valley wineries threaten to charge at the cellar door,” Sydney Morning Herald, December 2

[ii] NSW Government, Office of Liquor, Gaming and Racing, “NSW cellar door subsidy scheme,” @ www.olgr.nsw.gov.au/liquor_info_cellar_door.asp recovered on December 6

[iii] Joel Fitzgibbon, “Cellar door hit will leave glass half empty,” Newcastle Herald, December 6

[iv] Australian National Audit Office, Administration of the wine equalisation tax, 2010 @ www.anao.gov.au/~/media/Uploads/Documents/2010 2011_audit_report_no20.pdf recovered on December 10

[v] ABC News, “Cellar door charges: tourism ‘death knell’” December 4 @ www.abc.net.au/news/2012-12-04/cellar-door-charges3a-tourism-27death-knell27/4406206

[vi] Casamento and Aston, ibid

'2012