Patrick Secker (Barker, Liberal Party) Share this | Hansard source

There is nothing wrong with the Margaret River wines. I just think they are overpriced compared to some of the others—certainly the wines that come from my electorate. Many jobs and livelihoods are being compromised. Growers are having to sell up and move on or are struggling to hang on by the skin of their teeth, knowing that each season may have to be their last. That is a real shame. Oversupply is a huge problem, but I can tell you from my personal history that the wine industry, the grape industry, had a downturn in every decade bar the 1990s. What has always happened is that grape prices go up, people start planting and it takes four or five years before you get some decent production out of a block, and by that time all the extra vines have oversupplied the industry. But in the 1990s the wine industry went for export. That has been very successful for close to 20 years. We now have the downturn that was missed in the nineties because of the push for exports.

There is no doubt that we have too many vines on the land. It is not for the government to say who pulls vines out. In fact, I do not support a vine-pull system funded by the government. We had that in the eighties when we had a downturn. We stopped it because we were pulling out some of the great old shiraz vines on the basis of it. We were getting some money for it, so we did it. We got some pain out of that decision.

But we do have a problem: MIS—managed investment schemes—legislation is still allowing for the planting of vines. There are quite large plantings still happening in the Barossa, for example. It is not for me, you or anyone else to say that they are wrong in doing that, because they might be right. When those vines start producing in four years time there might be a change in that oversupply, but I am not sure that it is a wise decision. I certainly would not be investing in the planting of grapes right now. By and large, as I said, the wine industry has survived with the high levels of wine being exported. It prides itself on the excellent quality of wine. We have maintained high levels of trade and that is paramount in keeping the industry alive in Australia.

I think it is very interesting, when you look at how we have progressed in Australia. It certainly could not have been achieved without mechanical harvesting, because we just would not have had the pickers out there to pick the huge increase in the planting of grapes. We have certainly perfected the science of winemaking. In fact, people from even countries like France are coming to Australia now to try and get some of the expertise from Australia.

The purpose of the Australian Wine and Brandy Corporation Amendment Bill 2009 has three parts. The first is to allow the Australia-European Community Agreement on Trade in Wine 2008 to come into play; it is very important that we do so. The second is to strengthen the AWBC’s Label Integrity Program. I think consumer information is always important, so we should do that. We have to ensure truth in labelling and enhance consumer confidence in label claims. The third is to correct a number of weaknesses in the compliance provisions of the Australian Wine and Brandy Corporation Act 1980. There is no blame going on here. Things move on, and we have to make these amendments to improve the act.

The first purpose of the bill is to bring into force the Australia-European Community Agreement on Trade in Wine 2008, and it is about ensuring winemakers have continued access to Australia’s largest export market, Europe. I do not know how long it will stay as the largest export market; it is certainly way ahead of the others. But I think we have huge potential in Asia—in Japan—as well as in the United States and Canada to actually improve our exports in that area. Presently I am working with our officials in Guangzhou, the old Canton province in China, to help promote Australian wines at their expo. I think it is in October this year. It is important that I get as many of the wine producers in my electorate to the expo to jump on the growing demand for quality wine in China, because China’s state brand, to put it bluntly, is not great wine—it never has been and never professes to be great wine. It brings to mind raspberry cordial as an equivalent in quality.

The give you an idea of the proportions of the European market, during the 2007-08 period Australia exported 397 million litres of wine to the European community, and that was worth $1.3 billion. That is a pretty large amount for any industry. The European community accounted for just over half of our wine exports during that time. It is important that we keep this level up and even, if we possibly can, increase our percentage there whilst at the same time trying to increase our share of other markets around the world. If we go by quality and price, I think we can compete very well. During that period, Australia imported 18 million litres from Europe. That is 18 million litres versus 397 million exported, so we actually have a very positive balance of trade there, but it was valued at $212 million. So obviously, if you look at those figures, we have been importing quite expensive wine, probably on a connoisseur level compared to some of the wine that we sell. I think that is one of the problems for Australian wine: we need to see if we can get the price point at which we are exporting higher.

This agreement on trade has many benefits to Australian producers, one of which is the European recognition of an additional 16 Australian winemaking techniques. I raise one of these techniques in particular, and that is the use of oak chips in the fermentation process, which can deliver in a matter of weeks an intensity of oak character that would take one to two years to achieve in oak barrels. If anyone understands anything about wine they will know what I am talking about when I talk about the oak characteristic. A former colleague of mine, a former member for Wentworth, explained to me that when he was in the United States he was getting a lot of information that Europe was actually trying to stop Australia using that technique as a form of non-tariff trade barrier. I am very pleased that we have been able to get over that sort of proposed non-tariff barrier, that we have outstared them and that we will still be able to use that technique.

If anyone looks at the wine industry, they will see that more and more of our wine is produced not for the connoisseur but for someone who is going to buy it and consume it within 48 hours. It is often said that 90 per cent of wine in Australia is consumed within 48 hours of purchase. This is a matter of convenience, and a lot of people do not have the facilities to store wine properly and are not interested in storing a whole lot of wine for the future. I have been buying wine for many years, and I do store wine quite often for 10 years or more. It is an important part of the mystique of the wine industry, and it is something we have to continue to encourage.

Other techniques which I know will be recognised include spinning cone technology and reverse osmosis. Both techniques are used in the de-alcoholising process, to lower the alcohol content of wine. I was recently in the Riverland and spent some time at a property where they are using world class technology to irrigate their vines and measure soil quality. That is an important part of producing good wine—you have to make sure you get the quantity and the quality right. If you overproduce it is going to be hard to produce the quality, but having the right soil and the right climate plays a large part in producing high quality wine.

Unfortunately, those same growers who are using this world class technology are really struggling. Although the technology has improved their practices immensely, the drought is taking its toll on production levels and unfortunately their future is at stake. We need to ensure that we continue to encourage these people to take up the best possible techniques. We need to be protecting growers and providing programs that help them to continue exporting and keep productivity at sufficient levels to meet new demand. Certainly we can do that through our export grants and other measures.

The government’s Henry tax review proposed a disastrous switch to a volumetric tax system. We know that Ken Henry has always wanted a volumetric tax, and on the face of it you would say that was the fairest thing. But it would be an absolute disaster for the wine industry if we changed to a volumetric tax system. It would have pushed many growers to their limit, and many of them would have been pushed out of the industry altogether. They simply would not have survived under that sort of change. Thankfully the government shelved the recommendation, and I was certainly ready to make a whole lot of speeches had they accepted it. We do need to protect the value of the produce we are exporting, maintaining a high standard that reflects Australian wine of the utmost quality.

The second and third parts of the Australian Wine and Brandy Corporation Amendment Bill 2009 strengthen the AWBC’s label integrity program and correct some of the weaknesses in the compliance process. It was introduced to ensure an industry wide system of record keeping to substantiate label claims in respect of vintage, variety and region of origin—very important things when it comes to producing wine. The AWBC 2007-08 annual report states that the corporation’s auditors monitor the industry for compliance with the label integrity program provisions of the AWBC Act and checks that the origin of the wine can be traced from the grapevine through the dispatch of an export consignment or to a domestic retailer’s shelf. A total of 133 LIP audits were conducted throughout Australia in 2007-08, with 76 wineries visited in South Australia, 19 in Victoria, 19 in New South Wales and seven in Tasmania. That is only a reflection of the fact that South Australia produces over half of Australia’s wine.

The annual report also states that wine compliance continues to be very high, and that is very pleasing to hear. Nevertheless, the export licences of two wine producers were suspended during the year due to non-compliance with LIP provisions. So we are acting to continue to uphold this high compliance. This bill seeks to require all those involved in the production, distribution and sale of wine and grapes used to make wine to record the specified information to ensure a traceable trail throughout the wine production process. I certainly support measures that streamline and improve production, and encourage the wine industry to keep doing what it does best: making wine that can be enjoyed the whole world over, and especially in Australia.

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