The eligibility of New Zealand wine producers has attracted much of the air time in discussions over the WET rebate, but McGuigan told drinks bulletin this is something of an “emotional” issue, in terms of what it actually costs the Federal Government.
Having recently returned from a tour of several key export markets, McGuigan said the more serious issue is that bulk wine is being exported overseas with a WET rebate attached to it.
“I’ve seen it in the marketplace and the prices that are being quoted are unsustainable,” he said.
“The WET rebate on bulk wine in this country is muddying the waters for the true wine producers that have skin in the game. It creates unsustainable selling prices for bulk wine in the domestic market, and now, as I’ve been finding out on my travels, it is actually getting into the export arena.”
“That is bad for the Australian wine industry and it is bad for the true Australian wine companies,” McGuigan said.
He said the Winemakers Federation of Australia (WFA) had called for bulk wine to be ineligible in its submission to the Federal Government’s discussion paper on the future of the WET rebate.
“I think what has been put forward by our friends at the WFA is absolutely spot on,” McGuigan said.
“I think [WFA CEO] Paul Evans has done an outstanding job of getting everyone basically aligned with what should happen. And if the government does not react to, and support what the WFA has put forward, I think it will be detrimental for the wine industry until it is resolved and accepted.
“If you’ve got competitors out there that are producing wine that has been unjustly subsidised by the Government, I think it is absolutely wrong and we’ve got to get it fixed,” he said.
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