Abolish WET tax, major Australian producers urge government
- Tuesday 27 September 2011
Yarra Valley (Image: Wine Australia)
The Wine Equalisation Tax (WET) exacerbates the country's oversupply problems, Premium Wine Brands and Treasury Wine Estates say.
WET is a value-based tax paid on both New Zealand and Australian wines consumed in Australia.
It entitles producers to an annual rebate of 29% up to a maximum of AUS$500,000 and is widely seen as beneficial to smaller producers.
In its submission to the government, Treasury estimates that AUS$900m is collected as WET each year, with more than $200m returned to producers as a rebate, of which $30m goes to New Zealand producers.
Both Pernod Ricard-owned Premium, and Treasury Wine Estates, claim WET distorts market forces, has enabled unsustainable players to survive, and hindered consolidation.
Premium Wine Brands CEO Jean-Christophe Coutures added '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'.