State Cellar Door Rebate - Avoiding Unintended Consequences

A discussion paper prepared by the Department of Primary Industries and Regions South Australia (PIRSA), was circulated to South Australian wine producers on Monday 22nd June.  The paper outlined a consultation process to review the current State Cellar Door Rebate in South Australia.

While the SA State Government is considering abolishing the Cellar Door Rebate in SA, a process of industry consultation will occur to ensure any decision made does not have unintended consequences.  This is in stark contrast to the manner in which the WA Government abolished the rebate where no industry consultation whatsoever occurred. 

The PIRSA discussion paper acknowledges "that the Australian Grape and Wine Authority (AGWA) submission to the current Senate Standing Committee Inquiry into the Australian grape and wine industry notes the challenges faced by the industry over the last decade" and that "these challenges have led to a fall in the profitability of the Australian wine sector".  AGWA suggests that "addressing these challenges and being in a position to take advantage of potential opportunities to grow demand for Australian wine will require a coordinated effort from the industry, stakeholder groups and individual companies".

Based on these observations, the PIRSA discussion paper includes consideration of how the SA State Government can continue to support future industry and regional development through a "South Australian Wine Industry Fund" if the consultation process determines that the rebate should be abolished.  The SA State Government clearly takes seriously the potential to "grow demand for Australian wine".  The SA State Government also clearly values the contribution to its State economy that the wine industry provides. They also apparently believe the potential value of future growth in the SA wine industry will significantly exceed investment provided to support this growth.   

This acknowledgement of the importance of the wine industry to the SA economy is commendable.  The consultation process utilised to develop an evidence based policy position is sensible.  The results of this process will no doubt provide South Australian wine producers with significant competitive advantages over West Australian wine producers, allowing them to seize opportunities that require coordinated partnerships between industry and stakeholders.

Wines of WA  once again requests that the WA State Government defers the decision while a proper consultation process is undertaken.