PERNOD-RICARD ALSO WANTS WET AXED

PRESS STATEMENT

Premium Wine Brands Calls for Tax Reform to Address Oversupply of Australian Wine

In a submission to the Federal Government’s upcoming tax forum, Premium Wine Brands will today call for significant reform of the wine taxation system to help address the oversupply issues facing the Australian wine industry.

As one of the largest winemakers in Australia, with global wine brands such as Jacob’s Creek and Wyndham Estate, Premium Wine Brands believes that the current wine glut is one of the most serious challenges facing the Australian wine industry.

In the submission Premium Wine Brands states that recent figures for vintage 2011 released by the WFA showing an increase in wine production, despite adverse weather conditions, are further evidence that industry efforts to tackle oversupply have not resulted in any significant restructuring.

The submission goes on to state that current wine tax arrangements are actually impeding efforts to restructure the wine industry as they distort market forces that would otherwise operate to address the structural oversupply issues.

Premium Wine Brands is urging the Government to reconsider its policy position in relation to wine tax arrangements and has suggested:

• The abolition or significant reform of the WET rebate system that currently provides a subsidy to all wine producers totalling over $200 million per year (around $30 million of which is estimated to go to NZ producers); and,

• Taxing wine on a volumetric basis, with the tax rate set at a revenue neutral level (in line with the existing category based tax approach).

Launching the submission, Premium Wine Brands Chairman and CEO, Jean-Christophe Coutures, said: “Premium Wine Brands is passionate about the future growth and development of the Australian wine industry and we are investing behind our vision of an industry lead by strong brands and premium quality wines.

“The sustainability of the industry is seriously threatened by oversupply and the real damage to the strong brand that Australian wine has built for itself over years that this is causing. Industry efforts to restructure have not succeeded and there is an urgent need for intervention to remove impediments to the restructure process – we believe that this includes the current wine tax arrangements and we would like to work with industry and Government to address this.”

James Wright
Global Corporate Communications Manager, Premium Wine Brands, Pernod-Ricard