Monday, 06 April 2015 00:00

MPI fees threaten wine exports

Written by 

The Ministry of Primary Industries' proposal to impose higher costs on the wine industry is a major threat to the sector and its export business, says Alistair King from Crowe Horwath.

 

The MPI has said the increased levies are necessary to recover the costs of its regulatory programmes, yet the wine industry already contributes $200 million annually in excise tax.

"They are now seeking an additional $2.9 million from the industry to meet MPI regulatory costs," says King, who is chair of the Central Otago Pinot Noir Charitable Trust.

King says the MPI operates a user-pays regime with regard all agricultural and horticultural sectors. However, unlike the other primary sectors, the wine industry also pays a product-specific excise tax, which has increased massively for the wine industry.

"Margins for the industry are very tight and further costs will reduce profitability further. The industry needs the government to support growth," says King.

"Under its Business Growth Agenda, the government says it is committed to encouraging economic growth in the regions. Penalising winemakers with an additional cost burden flies in the face of that policy."

More like this

Dairy, hort lead bounce back

The latest Ministry for Primary Industries report on the state of the primary sector shows that things are starting to look up after a rough 2023-24 season.

Vineyard Monitoring Report

Lower yields and a reduced grape price for Sauvignon Blanc, along with a 6% rise in operating expenses, saw a major fall in profitability in the Marlborough vineyard model in 2023/2024.

Winter grazing warning

Every time people from overseas see photographs of cows up to their hocks in mud it's bad for New Zealand.

» Latest Print Issues Online

Popular Reads