Government's unilateral new excise policy doomed to fail

The new excise policy on alcohol has been slammed as unjust and bound to fail by New Zealand Winegrowers, the industry body for the country's winemakers and grape growers. It is a gross breach of a Government undertaking to consult with the industry on this issue.

"The policy will put some small winemakers out of business," said Winegrowers chairman, Mr Peter Hubscher. "It will make no contribution to solving the youth drinking problem. It penalises pensioners and is quite contrary to written undertakings given to our organisation by Hon Jim Anderton."

Mr Hubscher said many small winemakers had made a considerable investment in sherries and ports. As these wines typically need time to mature, wineries have substantial stocks on hand. "The change of the excise regime will have a marked impact in the market, making it extremely hard, if not impossible, for winemakers to sell the stock they have on hand. The financial impact of this could be disastrous, especially for smaller companies," said Mr Hubscher.

The biggest market for sherries and ports in New Zealand are pensioners, who are bound to find the price increase of $5 to $6 per bottle very hard to afford, especially since most of them are on fixed incomes. "This inflicts unnecessary hardship on people who have been contributing to our country for many decades and who are not part of the problem the new law purports to address."

He pointed out that sherries and ports have never been the drinks of choice for young drinkers.

The problem of youth drinking will not be solved by the new legislation. Mr Hubscher predicts that the producers of the light spirits which are so popular with young drinkers will simply change their product to have 13.9% alcohol to bypass the new rules. By using less juice or soft drink in the mix, young drinkers will then get very much the same effect as before.

"To make matters worse, this ill-conceived policy was rushed through without consultation - consultation the industry was promised in writing on more than one occasion by the Hon Jim Anderton in February of this year. It is a serious injustice that this promise was not kept."

Mr Hubscher said the importance of consultation was recognised by Mr Anderton. In his letter, Mr Anderton advised NZ Winegrowers that:

"If we are to find the solutions to the problems we are exploring then it is crucial that these should be ones upon which as many as possible of the stakeholders can reach agreement. If we don't take this approach then I doubt that we will succeed in our endeavours."

Since this correspondence, Winegrowers have had no consultation with government about this matter.

"We are fully supportive of the Government's commitment to resolve the issue of excessive drinking by young people," said Mr Hubscher. "We also agree with Mr Anderton's letter that consultation with stakeholders is central to successful policy outcomes. Like him, we believe that the new regime will fail in its objectives, because he has not taken key stakeholders with him on this issue."

"In our view, Mr Anderton as the chair of the Ministerial Action Group and Acting Minister of Customs must act to address this matter urgently."

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