Wineries feel WET pressure

Wineries are coming under pressure from some restaurateurs and others in the distribution chain to pass on the Federal Government’s wine equalisation tax rebate.

Leeuwin Estate chairman Denis Horgan, however, urged wineries to resist passing on any discount.

“What is happening is that retailers are putting pressure on for that 29 per cent to be passed on but you need to stop and think about what that means if the winery passes that on,” Mr Horgan told a recent Institute of Chartered Accounts Australia wine seminar.

“If the business is merged or sold to another producer, both don’t get the rebate, it only applies to the one winery.

“Passing it on will be a serious impediment to the rationalisation of smaller wineries.”

Mr Horgan said more than half of all small wineries in Australia did not make a profit, and urged them to “think long and hard” before discounting products.

“Deloitte have come up with a survey that says 53 per cent of wineries that turn over $1 million to $5 million in sales are running at a loss,” he said.

One vineyard operator, who declined to be named, told WA Business News he had been asked to pass on the 29 per cent discount, and said many restaurateurs were unaware that small wineries were not making money.

“It’s an essential rebate to help primary producers,” he said.

“It’s long awaited and very much required. If the restaurateur got a discount on their personal income tax would they then drop the price of scallops?”