Winegrowers want retailers to pay alcohol excise
The nation's grapegrowers and winemakers are asking the Government to switch its $145 million collection of alcohol excise from wineries to retailers."Excise is the major profitability issue on the domestic market," New Zealand Winegrowers said.
The nation's grapegrowers and winemakers are asking the Government to switch its $145 million collection of alcohol excise from wineries to retailers.
"Excise is the major profitability issue on the domestic market," New Zealand Winegrowers said.
"The level of excise is such that the Government currently receives substantially more excise on a tonne of grapes than the grower receives for growing them."
The industry group has asked the Government to consider switching from the excise levies -- an indirect tax on alcohol collected by the Customs Service -- to a specific tax charged on retail sales.
Wines are levied at a rate of $2.6021c a litre, while fortified wines such as port and sherry pay the equivalent of $47.392c for each litre of pure alcohol -- equivalent to $8.53 for a litre of port with a typical alcohol content of 18 percent by volume.
In addition, wineries have to pay a levy of 4.1893c/litre on table wine and 7.7748c/litre for fortified wines to fund the Alcohol Advisory Council, plus GST. The total tax paid on a $15 bottle of wine is $3.86, NZ Winegrowers said.
At a conversion rate of 720 litres of wine for each tonne of grapes, the Government gets $1873.51/tone, while the average price paid to a grower this year was $1292/tonne.
The industry's two main gripes are that collecting much of the excise from wineries before they get paid for their production causes problems in cash flows, and that in the recession many wineries are unable to pass on the inflation-based increases in excise charges.
Winegrowers NZ noted the 58 percent of wine is sold through two supermarket chains, which also own a number of the large liquor retail chains, such as Liquorland.
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