Excise rise will hurt NZ wineries

The 4 cents per bottle excise that was introduced by the New Zealand government will hurt wine prices, according to New Zealand Winegrowers.

Winegrowers recently surveyed wineries on whether they intended to pass the tax increase on to consumers and of the wineries that responded, 84 per cent indicated they would be forced to absorb the excise increase.

“Many wineries are already suffering financially and this latest tax increase will make the times that much tougher for them. The simple fact is the market will not accept price increases and wineries have no option but to absorb the tax rise,” said Winegrowers’ CEO Philip Gregan.

The survey also revealed that it is not the first time wineries have been forced into the position of absorbing annual tax rises. Of the more than 170 wineries who responded to the survey, 80 per cent indicated they had not increased prices in the past three years. In fact, 48 per cent of wineries said they had not increased prices for at least five years, despite excise rising 11.6 per cent since June 2006.

“This Survey highlights the serious financial pain annual excise increases are causing our small and medium wineries because excise is a production and not a consumption tax,” Gregan said.

“It also makes abundantly clear that those who want higher rates of excise as part of the Sale of Liquor reform will only succeed in putting wineries out of business.”


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