Coles, Woolies face WET fury
WA winemakers want Coles and Woolworths in the firing line when a Senate inquiry looks at how lucrative tax rebates apply in the industry.
Wines of WA chief executive Larry Jorgensen said the big retailers were pushing more of their labels onto liquor store shelves and cashing in on Commonwealth tax rebates of up to $500,000 a year.
New Zealand wine producers are also claiming about $25 million a year under the wine equalisation tax rebate scheme.
The Federal Government will release a discussion paper on the future of the WET rebate in July. The rebate will also come under scrutiny when the Senate begins an inquiry into the industry.
WA Liberal senator Dean Smith, who co-sponsored the inquiry, said the rebate was established in 2004 to help smaller winemakers and to promote regional employment.
“We now have multinational and foreign-owned conglomerates receiving the whole subsidy, much to the detriment of the small regional wine producer employing local people, investing locally and putting profits back into the region,” he said.
Mr Jorgensen pointed the finger at Coles and Woolworths as an example of how WET rebates were not working as intended.
“Coles and Woolworths will enter into an arrangement with a grower,” he said. “The grower will have his fruit processed at a facility for the purpose of filling a brand that has been constructed by Coles or Woolworths.
“The WET rebate becomes a part of that deal and that is not what it was intended to do.”
Coles and Woolworths are behind scores of wine labels and are estimated to control 70 per cent of the retail liquor market.
Mr Jorgensen said labels such as Cow Bombie — also the name of a noted surfing spot off Margaret River — created the impression they came from small local winemakers.
New Zealand winemakers get WET rebates under a free trade agreement signed in 2005 but Wines of WA believes the rules should be tightened so they at least have to file a tax return in Australia and hold the relevant Australian licences to qualify.
