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Australian Grape and Wine Industry The Senate Rural and Regional Affairs and Transport References Committee Australian grape and wine industry February 2016 © Commonwealth of Australia 2016 ISBN 978-1-76010-318-7 This document was prepared by the Senate Standing Committee on Rural and Regional Affairs and Transport and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivs 3.0 Australia License. The details of this licence are available on the Creative Commons website: http://creativecommons.org/licenses/by-nc-nd/3.0/au/. Membership of the committee Members Senator Glenn Sterle, Chair Western Australia, ALP Senator the Hon Bill Heffernan, Deputy Chair New South Wales, LP Senator Joe Bullock Western Australia, ALP Senator Sue Lines Western Australia, ALP Senator Peter Whish-Wilson Tasmania, AG Senator John Williams New South Wales, NATS Other Senators participating in this inquiry Senator Chris Back Western Australia, ALP Senator Sean Edwards South Australia, LP Senator Alex Gallacher South Australia, ALP Senator John Madigan Victoria, IND Senator Bridget McKenzie Victoria, NATS Senator Anne Ruston (to 12 October 2015) South Australia, LP Senator Rachel Siewert Western Australia, AG Senator Dean Smith Western Australia, LP Senator Nick Xenophon South Australia, IND iii Secretariat Mr Tim Watling, Secretary Ms Erin East, Principal Research Officer (to 24 November 2015) Ms Bonnie Allan, Principal Research Officer Mr Nicholas Craft, Principal Research Officer (from 12 October 2015) Dr Jane Thomson, Principal Research Officer (to 6 July 2015) Ms Erin Pynor, Senior Research Officer (from 26 October 2015) Ms Trish Carling, Senior Research Officer Ms Kate Campbell, Research Officer Ms Lauren Carnevale, Administrative Officer (to 30 June 2015) Ms Alexandra Logan, Administrative Officer (from 6 July 2015 to 6 November 2015) Mr Michael Fisher, Administrative Officer (from 7 December 2015) PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3511 Fax: 02 6277 5811 E-mail: [email protected] Internet: www.aph.gov.au/senate_rrat iv Table of contents Membership of the committee ......................................................................... iii Abbreviations .................................................................................................... ix Recommendations .............................................................................................. xi Chapter 1.............................................................................................................. 1 Background ............................................................................................................... 1 Conduct of the inquiry ............................................................................................ 1 Acknowledgement .................................................................................................. 2 Outline of the report ............................................................................................... 2 Value of the industry .............................................................................................. 2 A 'structural mismatch of supply and demand' ....................................................... 5 Impact .................................................................................................................. 6 Industry recovery ................................................................................................. 9 Chapter 2............................................................................................................ 11 Wine equalisation tax rebate ................................................................................. 11 Cellar door rebate scheme .................................................................................... 12 WET rebate scheme .............................................................................................. 13 Treasury Tax White Paper ................................................................................. 15 Criticism of the wine equalisation tax .................................................................. 16 Criticism of the WET rebate................................................................................. 19 Distorting the market ......................................................................................... 20 'Rorting' ............................................................................................................. 22 Bulk wine industry ............................................................................................ 24 Retailers receiving the WET rebate ................................................................... 25 Merged entities .................................................................................................. 25 New Zealand producers ..................................................................................... 26 Reforming the WET rebate .................................................................................. 29 v Capping the rebate ............................................................................................. 29 Tightening eligibility for the rebate ................................................................... 30 Removing the rebate .......................................................................................... 32 Impact of reform ................................................................................................ 33 Chapter 3............................................................................................................ 35 Wine retail ............................................................................................................... 35 Private or own brands ........................................................................................... 36 Labelling ............................................................................................................ 37 Market share ......................................................................................................... 38 Addressing the market power imbalance .......................................................... 41 Delivery ................................................................................................................ 43 Responsible Service of Alcohol qualifications .................................................... 45 Chapter 4............................................................................................................ 47 The role of AGWA and the export market .......................................................... 47 Australian Grape and Wine Authority (AGWA) ................................................. 47 Levy collection .................................................................................................. 48 Structure of AGWA ........................................................................................... 49 Research and development (R&D) ....................................................................... 50 Data collection ...................................................................................................... 52 Export market ....................................................................................................... 54 AGWA's role in exports .................................................................................... 56 Export Market Development grants .................................................................. 57 Marketing Australian wine ................................................................................ 58 Chapter 5............................................................................................................ 63 Industry representative organisations .................................................................. 63 Code of Conduct ................................................................................................... 65 Low uptake ........................................................................................................ 66 Considering a mandatory code .......................................................................... 68 vi Dissenting report of Senator Sean Edwards and Senator the Hon Bill Heffernan ........................................................................................................... 73 Dissenting report of the Australian Greens .................................................... 77 Dissenting report of Senator Nick Xenophon ................................................ 81 The Wrath of Grapes ............................................................................................. 81 Enough is enough ................................................................................................. 81 Wrong Way, Go Back .......................................................................................... 82 Going Down, Down, Down – The Effect of the Duopoly on the Wine Retail Sector .................................................................................................................... 85 Appendix 1 ......................................................................................................... 87 Submissions received .............................................................................................. 87 Additional information received ..........................................................................
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