Abolish WET tax, major Australian producers urge government

Premium Wine Brands, Treasury Wine Estates, WET News Wine News http://decanter.media.ipcdigital.co.uk/11150/000001c97/26fc_orh100000w160/Yarra-Valley-01.jpg http://decanter.media.ipcdigital.co.uk/11150/000001c97/475e/Yarra-Valley-01.jpg
  • Tuesday 27 September 2011

In a bid to reduce Australia's wine glut two of the country's major players are calling for the abolition of the WET tax.

Australia Yarra Valley

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'.

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