So, I hear you asking, what relief has our own government provided NZ wineries this July. If you thought the answer was none you’re hopelessly optimistic. From July 1 2013 we are paying an extra 3c a litre towards the government’s multi-million program of stealing money from wineries and rural communities aka Excise. We now pay the government, every month, over $25 for every case of wine we sell.

To put that in perspective, we are a very small winery and in our 20-odd years of operation we have now paid over a million dollars in excise! If we didn’t have excise the government would still have received some of that million in tax on profits but most of it would have been spent in our rural community on employment, better wages and re-investment for future growth. Instead that money disappears into a black hole in Wellington and its loss to us makes the sustainability of an inherently risky business
(weather, frost etc) that much more difficult.

So, the Australian government helps us and our own government hammers us – oh the irony!

Roger Parkinson

July 2013

To put that in perspective, we are a very small winery and in our 20-odd years of operation we have now paid over a million dollars in excise!

If we didn’t have excise the government would still have received some of that million in tax on profits but most of it would have been spent in our rural community on employment, better wages and re-investment for future growth.

Instead that money disappears into a black hole in Wellington and its loss to us makes the sustainability of an inherently risky business
(weather, frost etc) that much more difficult.

Thanks Bill – for nothing.

Roger Parkinson

The big unanswered question for the wine industry is whether domestic consumers will follow NZ wines back up the price chain when the wine supply/demand equation comes back in to balance.

The imported wines that used to populate the sub $10 market before NZ wine migrated downwards are still waiting in the wings so it will not be any general shortage of cheap wine that provides the answer to future consumer behaviour in respect of NZ wine. Nor, despite the general industry view that the quality of the discounted NZ wines was so much better than the imported wines they displaced, will that automatically ensure that consumers share that view or even care, in the face of price rises.

Given that the recession and over-supply occurred simultaneously it has been impossible to accurately assess how much of the discounting has been supply driven and how much has been due to recessionary pressures on consumer spending. However, it is reasonable to state that the more that recessionary factors are the cause, then even with resolution of over-supply issues,  price increases for NZ wine in the domestic market will not be possible without a major turnaround in consumer confidence.

Based on those realities I think it would be very unwise to assume that domestic consumers will simply accept paying more for NZ wine if it is more expensive than they have been accustomed to paying over the last two years. My view is that wineries and the industry as a whole will have to re-establish the consumer proposition that under-pinned pre-discounting prices for NZ wine, if we are to return to those price points.

At the right time, wouldn’t it be a good idea for NZ Winegrowers to co-ordinate and fund a campaign to reignite New Zealanders passion for the quality (as opposed to the cheap price) of our wines? Given that NZ remains the largest market for NZ wine, and the only market for a large number of small wineries, it should be a straightforward decision to make, shouldn’t it? Not a chance, or at least not while representation on the board of NZ Winegrowers is guaranteed to be dominated by the interests of the large wine companies.

The last time the question of domestic promotion of NZ Wine arose,  around 1995 as I recall, a Buy NZ Wine campaign was proposed. The proposal was promptly squashed and replaced with the sop of an expensive and glorified trade show in Auckland. It was never stated but the inference was that the large companies vetoed the original proposal as it would involve  some of their levy contributions funding competition with their own commercial advertising and interests.

So, although promotion of NZ wine in the domestic market may be an important step in re-establishing sustainable prices for our wines, there’s not a snowball’s chance in hell that NZ Winegrowers will fund or coordinate it if the large companies put their own commercial interests ahead of the team we are all supposedly part of. If I’m proven wrong any time in the next two years I will send an apologetic bottle of wine to the CEO of each of the category 3 (large) wine companies. I will not be holding my breath.