WINES OF WESTERN AUSTRALIA ANNUAL REPORT 2016-17 __________________________________________________________________________________ 2016/17 ANNUAL REPORT WINE INDUSTRY ASSOCIATION OF WA (INC.) 17 October 2017 WINES OF WESTERN AUSTRALIA ANNUAL REPORT 2016-17 __________________________________________________________________________________ Contents Introduction 3 2016/17 Strategic Priorities 4 President’s Report 5 Treasurer’s Report 8 Chief Executive Officer’s Report 9 Membership Report 12 Technical Report 14 Board of Directors 16 Wines of WA 2016-17 APC Budget 17 Financial Report 18 Appendix – 2016 Vineyard and Production Data WINES OF WESTERN AUSTRALIA ANNUAL REPORT 2016-17 __________________________________________________________________________________ Introduction Wines of WA Charter WA producers have mandated that Wines of The Wine Industry Association of Western WA should, “provide stewardship of the Australia (Inc.) (Wines of Western industry” to create opportunities for producers Australia), established in 1987, is the and the fine wine regions of WA. state’s primary organisation of wine producers. From an operational point of view, this service is provided through: It is our mission to provide a unified, strategically influential voice that creates • Advocacy to ensure government, at all opportunities for the fine wine regions of levels, understands our industry – the benefits we provide to the state Western Australia. economy, particularly in regional WA and the assistance and resourcing we Industry Overview require to further develop out industry. • Representation to ensure the value of Wine is a major value adding industry with industry is clearly understood by significant regional economic and employment government, the community and other benefits. In 2014/15 the total value of the WA complimentary industry sectors. We wine industry was estimated at $684 million need to ensure our social license to with a grape value of $65 million. Regarding operate is retained and strengthened. market channels, 48% of total value was sold in We need to build strong partnerships WA, 40% in eastern Australia and 12% in with tourism, agriculture and fisheries by exports. developing complimentary market The Western Australian wine industry produces development programs. We need to about 42 million litres of wine annually raise the stature of our industry so that representing just 3% of the volume of West Australians are truly proud of their Australia’s wine production but 8.5% of the wine industry. value. • Administration of technical and WA Wine Industry Vision marketing program funding to provide Regional Associations and producers As outlined in the WA Wine Industry Strategic access to opportunities to improve Plan 2014 – 24, WA producers have a shared business practises and market access. vision of: • Communication to ensure wine industry “a Western Australian wine industry that grows participants are aware of the issues that sustainably and profitably, built on the affect their business enabling them to reputation of its great fine wine regions” make informed decisions on the The pathway to this vision is a unified and direction of the industry and their strategical influential industry focused on individual business. regional fine wines of provenance and We look forward to working with Producers and authenticity. Producers and Regional Regional Associations in 2017-18 on Associations are the custodians of their developing a sustainable and profitable future Regional brand. for the WA wine industry. Page | 3 WINES OF WESTERN AUSTRALIA ANNUAL REPORT 2016-17 __________________________________________________________________________________ Strategic Priorities 2016-17 Priority Priority Issues Activities and Progress 1. Secure Implement APC funding model in Assist Regional Associations to implement Funding 2016-17 Financial Year APC funding model Model for WA wine industry Assist producers in complying with APC funding model Continue engagement with DAFWA, DSD, Secure funding and resources for AGWA and Regional Associations to obtain export and domestic market funding and resources export and domestic development market development Continue working with DAFWA, submit 2. Market application for R4R funding. Development Support wine tourism initiatives and direct sales channels. Deeper engagement with Tourism WA to ensure “Taste 2020” potential is realised. Support Busselton airport development and advocate for supporting infrastructure across south west Smoke taint Chemical resistance Improved Technical Committee to implement 3. RDE & clonal material (including programs to address identified challenges Adoption alternative varieties) through the AGWA Regional Program support for fine wine Business model innovation WoWA to advocate for policy settings and business model government support to address identified Pest and disease management challenges Sustainable viticulture Continue to work with producers and RAs to Ensure taxation regime offers best refine position on wine tax. Support WFA operational environment for WA and WGGA where appropriate and in line 4. Taxation and fine wine producers. with WA producers. Regulation Ensure legislation offers best Advocate for further amendments to Liquor operational environment for WA Control Act to improve access to market, in fine wine producers. particular, direct to consumer channels WINES OF WESTERN AUSTRALIA ANNUAL REPORT 2016-17 __________________________________________________________________________________ Smoke Taint 1. President’s Report This year’s vintage was a later than normal season. Spring was wet and early summer Tax was cool. Spring burn offs didn’t occur as planned and we were faced with a situation In the last twelve months, WoWA achieved of large fuel loads and perfect burning significant outcomes in delivering benefits conditions during Autumn. to WA producers. We campaigned hard in Canberra, with significant help from Senator What eventuated was a potential disaster Dean Smith, Senator Mathias Cormann, averted. WoWA and Regional Associations Christian Porter MP, Nola Marino MP and played a pivotal role in communicating and Rick Wilson MP. WA producers were facing educating the Department of Parks and the unpalatable situation of seeing the WET Wildlife about the potential loss of crop and rebate reduced from $500,000 to $290,000. the financial impact that would have within Additional “skin in the game” tests requiring regional communities. ownership of assets across the production Federal Government Export and Regional chain would have excluded many producers Wine Support Package (ERWSP) and threatened income streams for contract winemakers. In the May 2015 pre-budget submission by the Winemakers Federation of Australia WoWA successfully prosecute the case to (WFA), State Associations provided letters have the rebate “refocused”, not reduced. of support for a support package of $25m We argued that a cut in the WET producer (along with support of WET integrity rebate was an increase in taxation and measures). It was WoWA that led the would disproportionally impact WA charge at WFA to increase this to $50m producers. The outcome was that we were able to advocate for the introduction of a The $50m that was pledged to industry has cellar door incentive scheme of $100,000 had significant WoWA involvement with and secured a floor for the rebate at Colin Bell and Simone Furlong-Horgan and $350,000. We were also able to advocate me participating in the reference group that for the concept of ownership of grapes at helped build the business plan for the crusher, rather than the ownership of a presentation to Federal government. Of the winery as the eligibility criteria. These two $32m that is allocated to Wine Australia key policy positions ensured that WA with a focus on USA and China, we are producers from very small to large were pleased that Simone Furlong-Horgan has assured of short-term certainty regarding been accepted on the advisory panel over- the WET rebate. seeing that fund. While this was a good short-term outcome, The business case determined $5m will be producers should be on notice that the allocated to states, currently targeting Federal Treasury department do not like international wine tourism. It is pleasing that rebates such and we need to be proactive we are working very closely now with other about a simpler and fairer structure into the state associations, and this college of future. states will submit a collective submission which states that the allocation should not be prescriptive, but rather align with state WINES OF WESTERN AUSTRALIA ANNUAL REPORT 2016-17 __________________________________________________________________________________ and regional strategic plans, as they are all has greater regional representation than it different and unique to each state. We were ever has, reflecting its grassroots origins. also able to achieve recognition of the importance of the WA fine wine segment Organisational Reform and its contribution towards wine tourism by The national grape grower body, WGGA, being allocated $1m of the $5m. has changed its constitution from a national Regional Strategic Plans grower body, to an organisation able to represent state and regional bodies WoWA pushed the case to Regional nationally, with an emphasis on small Associations on the importance of businesses from the grape and wine implementing (or reviewing/developing) community. It is now called Australian their strategic plans. An industry ratified Vignerons.