Respond to the WET paper

Dear Wine Growers/Producers/Makers,

Now is the time to take a moment and step away from the pruning, racking, bottling, selling, marketing or whatever diverse wine industry task you are doing right now and respond to this. Well not this actual blog, but the paper that the government has released via the treasury department.

Follow the link to visit the Treasury website and download the paper.
http://www.treasury.gov.au/ConsultationsandReviews/Consultations/2016/Wine-equalisation-tax-rebate

Download the paper, print it [only if you have to], read it, have a glass of Margaret River wine and digest it. The paper also, not just the wine. What is that you say? It is not going to affect you… well you are wrong. While it might not affect you directly, it will affect you in-directly, one way or another.

Spend some time considering your wine business, your neighbours business and your region overall.
Then write a submission, before the 7th October 2016.
Please.
B

Further reading:

Wines of WA WET paper
Consultation group report October 2015 – released in May 2016
http://www.treasury.gov.au/PublicationsAndMedia/Publications/2016/WET-Rebate-Consultative-Group-report

RSM survey of WA wine producers
http://www.rsm.global/australia/sites/default/files/media/offices/Busselton/wine_equalisation_tax_reform_consequences_report_june_2016_prepared_by_rsm_australia.pdf

Vineyard Paul – on Volumetric Tax
http://www.vineyardpaul.com.au/volumetric-tax-for-wine-i-dont-know/

Andrew Graham’s blog
http://www.ozwinereview.com/2016/05/wet-rebate-round-3-confusing-clarifying-press-release.html

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Cellar Door Staff Training

When was the last time you did a comprehensive staff training session with your Cellar Door staff?

If you have a distributor, I am positive that they would have conducted a sales rep training session within the last few months, if they don’t already do it weekly or monthly. The team of sales reps need to be fully educated before they go out on the road selling to retailers and restaurateurs. And, I am not just talking about wine training or product education.

Are you cellar door staff trained in sales techniques, marketplace education, team building, sales techniques, overcoming objections, building rapport and pitching? Your Cellar Door team are no different to your distributors team of sales reps, with one exception, they are selling to consumers, not businesses. Do they know how to make a pitch, overcome objections and build rapport with visitors to your cellar door?

Your cellar door is the hub of all Direct to Consumer [DTC] sales activity. It is the face and front line of your brand and where people come when they want to connect with the brand. Are you maximising this opportunity?

If you need some help with staff training, please feel free to get in touch with me.

Belle

WET rebate wine glut

Dear Treasurer,

Let’s say, hypothetically, 10 years ago [2006] you planted a small vineyard and built a cute cellar door venue in a wine region where wine tourism is quite good. You have a passion for wine and its something you have worked your whole life to achieve and to eventually hand down to your children.

You ask a local winemaker at a contract winemaking facility to make your wines, so you don’t have to invest again in building a winery and fitting it out with tanks, barrels and a cooling system.

This winemaker makes wines for several local vineyards holders and due to the cost efficiencies provided they can use the latest innovation and technology in winemaking that you could only dream of.

Now you make about 20,000 cases of wine a year and have just made it to your 10-year business goal to claim the maximum WET rebate of $500,000. You have approx. 2-3 years of stock in bottle or barrel.

Next year in 2016/2017 you will still be able to claim the full rebate but the year after 2017/2018 it will be reduced to $350,000. So what would you do in the next financial year to make the most of the rebate while its still here? Sell more wine in the FY 16/17 to claim the maximum rebate again. This will also reduce your stock holdings for the future years with the not so attractive reduced rebate.

This will see markets flooded with wine, probably cheaper than normal as wineries will now be competing even harder to maximize the final year of the rebate at $500k. Maybe it will only be those producers maximizing the rebate, maybe it will be those who see no future in the wine industry and want to exit.

Then in FY 17/18, you will need to make redundant [sack] two staff members with average salaries of $75k to cover the $150,000 loss of rebate. Maybe it will be your vineyard manager and your cellar door manager. A little ironic being that the original rebate was in place to assist wineries with regional employment and regional wine tourism.

Then you will need to run the vineyard yourself, making sure the fruit is up to scratch, as well as serving customers at the bar, trying to sell as much as you can direct due to the greater profit.

This isn’t even considering the impact on your agents/distributors, who have worked so very hard to build a trade customer base with retailers and restaurateurs.

And to top it all off, when 2019 comes around, your ‘winery’ [which you don’t have because your winemaking is outsourced] may not be eligible for the reduced $290k rebate.

Although the plus side is that unbranded wines is reduced in the market place [bulk and BOB wines], although that’s a lot of wine and where is it going to go…? Into newly created brands by the producer, exclusively sold to the retailers?

And of course, Wine Australia’s budget will be boosted to help promote Australian Wine all over the world.

 

http://www.budget.gov.au/2016-17/content/glossies/tax_super/downloads/FS-Tax/10-TFS-Alcohol.pdf

IMHO

Cheers and thanks for reading

B

 

 

Stirring up wine tourism

Last week, Hon Colin Holt, Minister for Racing and Gaming in Western Australia [not sure why they dropped Liquor from his title?] presented stage 1 of the liquor reform bills to parliament.

I just wish his name was Lee. Would have made the title of my very first blog somewhat entertaining.

I have heard that the bill will be passed in the next two to three months, mostly due to the secondary supply laws being rushed through before schoolies start in November.

Good timing really, considering the abolishment of the state Cellar Door Rebate recently. But it won’t really help any of those producers who lost the state rebate. And now we have to focus all our efforts on not losing the federal rebate.

Back to the bill… Along with many other stakeholders, the wine associations sent their recommendations to the minister three years ago, so these changes have been a long time coming. I personally have been looking forward to these changes since Amy at the state association sent me a copy of their recommendations back in 2012.

The changes that were presented are based on recommendations made by an independent review committee presented to the minister [Terry Redman back then] back in December 2013. Download Report.

Stage 1 includes the following amendments relating to the operations of wine & beer producers [which is where most of my interest lies]:
a) sell wine and beer produced under the producer’s licence at another premises, including establishing a collective cellar door operation between two or more wine or beer producers, in the wine region or local government district (for beer producers) where their respective production facilities exist;
b) sell or supply liquor other than their own product ancillary to a meal or for comparative tastings; and
c) to accept orders at a place other than the licensed premises (for example an office) if the sale is made online or by telephone. The despatch of such an order must be made from the licensed premises;

Download the Explanatory Memo.

The changes not only assist wine producers, as beer producers will now be allowed to sell their product for consumption on the licensed premises; without the requirement of an additional license, such as tavern or restaurant. Also producers [both beer and wine] will be allowed to sell or supply liquor other than their own product, provided it is ancillary to a meal or for comparative tastings. As well as removing some red tape around remote sales [i.e. from a home office], wine producers can now also attend farmer markets to show their wares.

But the big one for me is the collective… These changes will greatly assist in promoting wine tourism and tourism in general with new and exciting offerings for visitors. Therefore encouraging more visitors to wine regions and creating more jobs. The collective cellar door [retail outlet] for wineries is such a great opportunity for smaller boutique brands, who would only ever dream of opening a cellar door themselves. South Australia has had the collective laws in place for several years, although I know of a few collectives, such as Artisans of Barossa, but I really don’t know how successful they have been.

Currently, I am running a survey of producers to gather a better understanding of expectations if they were to join a collective type operation, start discussions and open up communication lines.

Please take the survey: START THE SURVEY

Who should complete this survey? To gather the most appropriate data, we are looking for decision makers to complete this survey. I.e. Owner, Proprietor, General Manager, Director, Marketing Manager. If this is not you, please forward this to the most appropriate person.

Please be assured that your responses will remain completely confidential. All participants who complete the survey in full will receive a copy of the anonymous summary once completed. Results may also be sent to government ministers and wine associations.

To ensure we get an even sample and a good range of data, we ask you that you please share this link with your friends, colleagues, neighbours and peers. This will enable us to capture a broader, larger range of data, so that the results are relevant, constructive and valuable.

I am very excited about future opportunities for producers, especially in the wine tourism and direct to consumer sales areas and hope that this survey may be able to assist some successful new wine tourism ventures.

Cheers and Thanks
B