WET reforms threaten to hamper cider industry growth

4 May 2016

Industry body Cider Australia welcomes reforms announced in yesterday’s Federal Budget to tighten eligibility for the Wine Equalisation Tax rebate but is disappointed the rebate cap will be reduced.

The WET rebate scheme provides rebates to cider producers as well as grape wine producers and is crucial to the viability of the domestic cider industry and the growers and local communities it supports.

The Government has announced that from 1 July 2019 eligibility criteria will be tightened to require claimants to own a winery or have a long term lease over a winery and sell packaged, branded wine domestically. The changes are being made to deter artificial business structuring and multiple rebate claims.

Cider Australia president Sam Reid said, “The cider industry has advocated changes for some time and welcomes stronger eligibility criteria and the closing of loopholes to preserve the original intent of the scheme”.

The Government is also proposing a reduction in the annual rebate cap from $500,000 to $350,000 on 1 July 2017 and $290,000 on 1 July 2018.

“Cider Australia does not support a reduction in the rebate cap while we don’t have a level playing field in labelling.

“It is unfair to reduce support for smaller craft producers on one side of the ledger when nothing is being done on the other side to level the playing field and clearly identify on shelf or on pack the low cost producers who are importing cheap apple concentrate”, said Mr Reid.

“Cider Australia calls for a share of the $300 million in projected savings to be diverted to cider industry development to assist producers to diversify and improve quality in their products”, said Mr Reid.

“A reduction in the cap will disproportionately impact the smaller, niche producers who are driving innovation and securing emerging opportunities to export cider”, said Mr Reid.

Cider Australia should participate in further consultation on eligibility criteria to ensure the definition of a winery appropriately captures cider businesses.

For more details or interviews contact Cider Australia President Sam Reid on 0434 734 797.