Wine industry welcomes response to excise proposal

Wine industry welcomes Government response to excise proposal

New Zealand Winegrowers – the national body representing the interests of New Zealand’s wineries and grape growers – has welcomed the Government’s response to a Law Commission recommendation to increase excise on wine by 50%.

Minister of Justice Simon Power has indicated that the Government will take a considered approach to the Law Commission report on liquor regulation, and noted that it was “extremely unlikely” that the Government would move to raise excise tax as part of its alcohol reform agenda.

“A major excise hike would penalise wineries and responsible consumers without reducing alcohol related harm” said New Zealand Winegrowers’ Policy Manager Dr John Barker.

“Excise is a production tax. In a fiercely competitive marketplace, it is virtually impossible for wineries to pass on excise increases to retailers and consumers. So excise increases just end up being another tax on winery income.”

“There couldn’t be a worse time for a major tax hike” said Dr Barker. “Current trading conditions are extremely difficult for wineries and a substantial increase in excise will make it very difficult for some wineries to remain economically viable.”

“Small wineries are particularly vulnerable. This part of the industry is a key driver of tourism and regional development, and anything that affects the profitability of small wineries will be felt in many rural centres.”

ENDS

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