May 2015

South Australian Senator Nick Xenophon recently suggested that a new wine tax of 25 cents per bottle he wants to impose on consumers, could be the answer to the problems of winegrape growers who are struggling to survive due to the very low prices paid by the wineries.

Mr Xenophon's new tax on the consumers could raise $100 million per year, which he doesn't really tell us how he wants it spent.

As the wineries are always lobbying the Government for more and more tax concessions and handouts to promote exports and other self interests, the winegrape growers are unlikely to receive any benefit from the new tax, no matter how much the industry manages to increase the exports.

According to the latest Wine Export Approval Report December 2014, released by the Australian Grape and Wine Authority (AGWA), "total Australian wine export volume increased by 1.9 per cent to 700 million litres and total value increased by the same rate to A$1.82 billion, the first time exports have risen in value since the global recession took hold in 2007", AGWA reports.

Despite the improvement of exports in the previous year, the new winegrape season saw the prices getting slashed even lower and the growers sinking further into debt. Could anybody explain why?

The AGWA report proves just how vital the role of the growers is in the chain, because even though they are going broke, their contribution to the Australian economy is still very significant as it brings into the country almost $2 billion every year. The growers deserve to get a fair share of that income.

If the Australian Governments want to support the hard working (and in previous years heavily taxed) growers stay on their properties and continue to be vital contributors to the Australian economy, these are some of the measures they could adopt:

* Offer concessional loans to the struggling growers to restructure their debts,

* Re-introduce a minimum price on wine grapes, to ensure a reasonable return to the growers which will cover their cost of production,

* Impose a moratorium on wine grape plantings,

*Utilise Government resources to plan for the future of the industry based on the sustainability of regional communities and not on the greedy interests of a few local and foreign big corporations.