Budget changes to WET

[Blake]

Hi all

last night the Government announced the provision of a wine equalisation tax (WET) producer rebate. In effect, the rebate will exempt $1 million of each producer's domestic wholesale wine sales from the WET on an annual basis, and will offset the entire WET liability for around 90% of wine producers. This measure will apply from 1 October 2004 and will be pro-rated for the 2004-05 financial year.

My understanding of this is that the reform will be of great significance to smaller producers, but that the impact of the rebate will be negligable on the producers with enormous domestic wholesale wine sales - ie. the companies that dominate the market.

Does anyone have any other thoughts ?

[Baby Chickpea]

Clearly the changes will yield significant benefits and the greatest relief to small wine producers in rural and regional Australia and effectively exempt 90% of Australia's +1660 wine producers from the WET.

However, from a stock price point-of-view (putting my work cap on), the lessened burden in the WET in no way offers significant advantages to the main volume players Southcorp (domestic annual sales of +$400M), FostersÂ’ Beringer Blass Wine Estates (+$300M), Lion Nathan (+$100M) and McGuigan-Simeon Wines (+$100M). Furthermore, don't hold your breath on small producers to cut prices as a result of the rebate, and therefore add further competitive pressure to the big four in the lower price points.

[brad]

Does anyone have a web link where I can read the detail of this budget measure please?

thanks, brad

[Baby Chickpea]

Most of the stuff is on www.budget.gov.au

The wine related stuff is one short paragraph at:

http://www.budget.gov.au/2004-05/overvi ... ain-20.htm

and in the speech:

http://www.budget.gov.au/2004-05/speech/html/speech.htm

[Guest]

Thanks, borrowed this from Jezza, found elsewhere:

http://www.budget.gov.au/2004-05/bp2/ht ... nue-06.htm

Seems the CD rebate is gone now.

[brad]

Thanks, borrowed this from Jezza, found elsewhere:

http://www.budget.gov.au/2004-05/bp2/ht ... nue-06.htm

Seems the CD rebate is gone now.

Sorry, twas me - the working-100%-effectively-in-the-bush-telstra kicked me off.

[Gavin Trott]

Hi All

Not sure of the details myself yet.

Having lunch today with Grant Burge (launch of a new super premium red). I'm sure the WET stuff will come up in discussion, interesting to hear Grant's views. He sure knows the wine business well and will have an interesting insight.

More later then.

[Jakob]

Having lunch today with Grant Burge (launch of a new super premium red).

What??!! What?! What? Please tell me this is an addition to the range and that the Meshach will survive with no degradation of quality? I know it's off original topic, but please do tell us what this is all about when you get back, won't you Gavin?

[Gavin Trott]

Having lunch today with Grant Burge (launch of a new super premium red).

What??!! What?! What? Please tell me this is an addition to the range and that the Meshach will survive with no degradation of quality? I know it's off original topic, but please do tell us what this is all about when you get back, won't you Gavin?

An addition, Shiraz Viognier blend. Most fruit from the Eden Valley vineyards so I doubt any Meshach fruit used at all.

Stay tuned!

[Guest]

Having lunch today with Grant Burge (launch of a new super premium red).

What??!! What?! What? Please tell me this is an addition to the range and that the Meshach will survive with no degradation of quality? I know it's off original topic, but please do tell us what this is all about when you get back, won't you Gavin?

An addition, Shiraz Viognier blend. Most fruit from the Eden Valley vineyards so I doubt any Meshach fruit used at all.

Stay tuned!

Okay, still tuned but this is a long ad break Obviously not all that exciting a wine then?

[GraemeG]

Back on the original subject - notice the way that the government makes reforms to taxes? They are done in such a way that the effect is eroded by time. In the same way that bracket creep ensures your average rate of income tax creeps inexorably up year after year, until you get a "tax cut" to win your vote, so the government has made changes to the WET not on a litres/year, but on the first $1million in sales. As years go by, and prices slowly rise, this $1m will gradually be worn away. Whereas now at $25/bottle it equates to 3,333 dozen (30,000 litres), by the time the price reaches $30/bottles, it's down to 2,777 cases, or 25,000 litres of wine. Eventually it will become insignificant (as the tax-free threshhold has become for personal income tax).

irritatedly,
Graeme

[GrahamB]

Having lunch today with Grant Burge (launch of a new super premium red).

What??!! What?! What? Please tell me this is an addition to the range and that the Meshach will survive with no degradation of quality? I know it's off original topic, but please do tell us what this is all about when you get back, won't you Gavin?

An addition, Shiraz Viognier blend. Most fruit from the Eden Valley vineyards so I doubt any Meshach fruit used at all.

Stay tuned!

Gavin

I saw some info on this when at G Burge about five weeks ago. Did not get to try it and can see why with an official launch.

Is it the RSJ1 (can never remember the letters he uses(MSJ etc)) now with a name following successful testing?

Graham

[Gavin Trott]

Having lunch today with Grant Burge (launch of a new super premium red).

What??!! What?! What? Please tell me this is an addition to the range and that the Meshach will survive with no degradation of quality? I know it's off original topic, but please do tell us what this is all about when you get back, won't you Gavin?

An addition, Shiraz Viognier blend. Most fruit from the Eden Valley vineyards so I doubt any Meshach fruit used at all.

Stay tuned!

Gavin

I saw some info on this when at G Burge about five weeks ago. Did not get to try it and can see why with an official launch.

Is it the RSJ1 (can never remember the letters he uses(MSJ etc)) now with a name following successful testing?

Graham

Hello

No, its called Balthasar, from my recent mailout


2001 Grant Burge Balthasar Shiraz Viognier $35

A blend of 93% shiraz and 7% viognier, 100% Barossa, with the majority of the fruits hand harvested from the Eden Valley vineyards. The 2001/2002 growing season was ideal for producing fruit of great depth, richness and complexity of flavour for this unique wine.

A vibrant cherry red/garnet colour, with delicate floral rose petals and honeysuckle Viognier characters combining superbly with dried fruit and complex spice aromas to create an enticing nose. The palate is soft, approachable and balanced with generous plum, and berry flavours and a hint of white pepper, ginger and cardamom pods, and well-integrated oak and fine elegant tannins. It is drinking well now, and will also cellar well for the next 3 to 4 years.

[GrahamB]

Hello

No, its called Balthasar, from my recent mailout


2001 Grant Burge Balthasar Shiraz Viognier $35

A blend of 93% shiraz and 7% viognier, 100% Barossa, with the majority of the fruits hand harvested from the Eden Valley vineyards. The 2001/2002 growing season was ideal for producing fruit of great depth, richness and complexity of flavour for this unique wine.

A vibrant cherry red/garnet colour, with delicate floral rose petals and honeysuckle Viognier characters combining superbly with dried fruit and complex spice aromas to create an enticing nose. The palate is soft, approachable and balanced with generous plum, and berry flavours and a hint of white pepper, ginger and cardamom pods, and well-integrated oak and fine elegant tannins. It is drinking well now, and will also cellar well for the next 3 to 4 years.

Gavin

I meant to put the name Balthasar in and ask is Balthasar RSJ1 with a Grant Burge type name or is it a completely new name.

Maybe they won't even say if it is a renamed trial wine.

Graham