Winemakers reject compliance levy

Wairarapa winemakers say a plan by the Government to up fees in the wine sector looks like "double-dipping".

The Ministry for Primary Industries is proposing to recover the costs of its regulatory programmes by introducing a compliance levy, a 1c per litre levy on exports, and stopping rebates for laboratory testing.

New Zealand Winegrowers, the national body for the sector, calculated it would cost the industry a "manifestly unjustifiable" $2.9 million a year, on top of the $200 million it pays in excise tax.

Richard Riddiford, managing director of Palliser Estate, which produces between 450,000 and 540,000 litres per year and exports 70 per cent of it, said they would be fighting it.

"It's not helpful, and they also seem to forget we pay them $200 million in excise tax."

He said it was already a tough climate and some wineries and vineyards were not making any money.

"Any extra costs in this climate are not welcome."

Roger Parkinson, chief executive of Nga Waka, a smaller winery which exports 5-10 per cent of its wine, said it seemed unfair.

"The industry already pumps about 200 million of excise into the Government coffers.

"Given the amount the industry pays, anything else heading in the Government's direction is unwelcome ... it seems extraordinary."

Mr Parkinson said he would prefer to see a reduction in costs.

"Our compliance costs are horrendous anyway, and a lot of this comes from the administration."

He said they would be making a submission once he read the finer details.

"Maybe it's part of a broader attempt to look at how it covers costs but they haven't considered the bigger picture.

"The ministry is looking at its own operating costs ... rather than looking at how they might be more efficient.

"It's hard to see what it is they are going to be asking for, whatever it is, it will look like double-dipping to us.

"We won't be happy, we'll definitely be opposing it."

NZ Winegrowers chairman Steve Green said they already paid enough through excise and the industry was a "stand-out performer" in the economy.

Last year, the Government collected $892 million in alcohol excise, which it charges the manufacturer in a bid to deter excessive alcohol consumption.

Turnover in the sector was $2 billion in the last financial year.

"We would have thought MPI, as part of the [Government's] Business Growth Agenda, would have been looking at how it supports the wine industry's growth, rather than imposing more costs on the sector," said Mr Green.

MPI's proposal, which is part of a wider review of fees in the primary sector, stated fees were set when the wine sector was in its infancy and it was now inconsistent with other similarly regulated sectors.

There was also more demand on its regulatory services as the sector had grown, it said.

Submissions on the proposal close February 20, 2015.