Nola Marino (Forrest, Liberal Party) Share this | Hansard source

I rise to speak on the Australian Wine and Brandy Corporation Amendment Bill 2009, which contains three schedules to align the penalties in the Australian Wine and Brandy Corporation Act 1980 regarding offence provisions and the use of penalty units as a replacement for fixed dollar amounts.

The purpose of the first schedule of the amendments contained in this bill is to make the necessary changes to the Australian legislation to bring the Australia-European Community Agreement on Trade in Wine into force. This schedule amends the Australian Wine and Brandy Corporation Act 1980 and the Trade Marks Act 1995 and will ensure winemakers have continued access to Australia’s largest export market. This will come as a benefit to all Australian wine producers, as it will give them European recognition of an additional 16 Australian winemaking techniques. It will also simplify arrangements for approving winemaking techniques that may be developed in the future.

The purpose of the second schedule of amendments to the AWBC Act is to further protect Australia’s reputation for the production of wines of quality and integrity. This is the key to our future in exporting wines. This will be achieved by strengthening the Australian Wine and Brandy Corporation’s Label Integrity Program. This schedule will simplify labelling requirements and create protection within Europe for Australia’s 112 registered geographical indicators. Under this amendment, wholesalers will have five years to sell stock labelled with EC GI and retailers will be able to sell all of their stock.

The third schedule corrects a number of weaknesses with the compliance provisions of the AWBC Act that have been identified. The changes to the compliance provision will strengthen the AWBC’s ability to stop people from engaging in ways that are contrary to the act and enable the AWBC to pass on information to others who could enforce the laws relating to wine and health.

The coalition is supportive of this legislation, but there are a number of factors currently facing the wine industry that I and the coalition also believe need to be acknowledged and addressed by the government. The wine industry in my electorate of Forrest is a very compact but very high-quality unit-value contributor to the national wine industry, with the Margaret River region recognised internationally as a producer of premium and ultra-premium wines.

During 2008 the estimated value of grape production in the south-west region was $67.8 million. The Margaret River wine region accounts for most of the viticulture production in the south-west of WA with 67.1 per cent of the total tonnage coming from the area. The south-west viticulture industry produces both white and red grape varieties with 26,259 tonnes and 24,000-plus tonnes crushed respectively in 2008. But the wine industry stretches right throughout the south-west from Harvey to Ferguson Valley and all the areas in between.

I recently conducted a survey of the wine industry in parts of my electorate that are currently facing some challenges and one of the major findings from the survey was the concerns and negative impact the new wine industry award is having on all of the wineries in my electorate. One winery owner stated:

The penalty rates in the modern award are a financial impost.

Our cellar business is in ‘wine tourism’—public holidays and weekends are the busiest and we will be unable to afford to pay the loadings required. THIS WILL COST JOBS!

Another winery owner stated that the new award is:

… confusing and very unworkable for both employers and employees in the industry.

On the issue of award modernisation processes I would also like to refer the minister to Tassell Park Wines in my electorate, which has been unable to receive clarification as to whether their winery business is covered under the new wine industry award or not. Tassell Park Wines, a family trust which has a corporate company as the trustee, has been in contact with both the Fair Work Ombudsman and the Chamber of Commerce in Western Australia seeking clarification on whether their business is covered under the new wine industry award. On both occasions, which concerned me greatly, they were advised to seek legal advice—that neither of these bodies could give them the definitive advice that they needed—and this would be at their expense. I call on the government to give Tassell Park Wines a simple answer as to whether or not they are covered by the new national award system.

Another issue consistently raised in my survey was the overwhelming supply within the market, also known as the wine glut. An article in the weekend edition of the Financial Review in May stated:

No longer able to sustain plunging prices for their fruit—or unable to sell it at all—an increasing number of grape growers will this winter begin ripping up vineyards as a persistent wine glut, high Australian dollar, a deluge of New Zealand wine imports and increased dominance by the supermarket chains conspire to erode profitability.

The article also quotes Wine Grape Growers Association executive director, Mark McKenzie, stating that he expects a further 3,000 to 5,000 hectares of wine grapes to be pulled out in areas including a part of the south-west in WA and central and western New South Wales. In another article also in the Financial Review, Mr McKenzie said that of Australia’s 165,000 hectares of wine grapes about 40,000 hectares should be pulled out.

A majority of the growers who have responded to my survey believe that the current wine glut is one of the major constraints to profitability. One winery owner summed up his situation by stating:

There will be on-going financial hardship until some kind of balance is restored—the industry is currently unviable.

The wine industry in my electorate of Forrest is suffering as a result of the current state of and pressures on the wine industry. A number of vineyards and wineries have been sold recently or are on the market and some smaller operators have not been able to lock in long-term fruit contracts. The cheap imports from New Zealand have led local growers in my electorate to launch a marketing campaign called Summer with the Locals to promote their wine and the local industry. I understand that 19 WA producers have contributed more than $100,000 towards the campaign. Campaign instigator, Jeff Burch from Howard Park Winery, was quoted in an article in the West Australian:

I got sick of seeing advertisements using the principle of banding whereby a good and respected quality WA wine was being offered with a cheap import …

We are not asking people to buy wine—

from WA—

out of a sense of parochialism but because we produce such a superior product …

As a result of cheap overseas wine imports, some wineries have been forced to reduce the price that they charge for what is a quality product. The Australian Financial Review reported on 30 January this year that Western Australian wines were selling from between $17 to $22 three years ago and are now advertised for $12.99 or lower. As you can see, Mr Deputy Speaker, there are significant issues that need to be researched and acted on to ensure the sustainability of the Australian wine industry.

In my electorate a five-point plan has been developed to assist the sustainability of the wine industry in the south-west region. The plan targets five key areas: strengthening of the domestic markets; expansion of export markets; building on the strategy of the overall Australian wine industry that combines a rigorous business- and return-driven approach, with quality and innovation; gaining a strong high-end position by cooperating with wine industry associations and national bodies; and developing partnerships with all levels of government to ensure that the south-west wine region is supported through liquor licensing trade facilitation and market access planning, environmental and business regulation, and taxation. This five-point plan aims at assisting south-west wine producers through the present and emergent issues currently facing the industry and facing the industry in the future. As we know, the main export markets for WA wines are the UK and the USA. Smaller niche markets established in Asian countries also contribute quite significantly to the local industry—even China.

While I am here, I briefly want to acknowledge the Dardanup Art Spectacular Trail and Exhibition that combined two very interesting factors: wine and art. This was a program in the Ferguson Valley where you could pick up a brochure and follow the art and the wine together, right throughout the Ferguson Valley. There was some wonderful entertainment at a sundowner, including a jazz band. It was a great way of promoting not only the south-west and our quality wines but also the great art and the experience of being in the south-west.

I support this legislation as a positive step for the industry, bringing the Australia-EC Agreement on Trade in Wine into force and protecting Australia’s reputation, particularly that of my electorate of Forrest, in producing wines of quality and integrity.

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