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Wine tax concerns to be raised with Australia

Media Statement
13 May 2004

Wine tax concerns to be raised with Australia

Australia appears to have breached its CER obligations and potentially overstepped WTO rules by introducing what was effectively a subsidy for local wine producers, Trade Negotiations Minister Jim Sutton said today.

Mr Sutton, in Paris for an OECD meeting, said he would be raising New Zealand's concerns vigorously with Australian counterpart Mark Vaile who is also attending the Paris meeting.

He said it was extremely disappointing that the Australian Government has sprung this move on its trading partners.

"We will be raising our concerns about this at various levels. I will be speaking to Australian Trade Minister Mark Vaile about it at our meeting here in Paris, and our officials will be raising it with officials in Canberra."

Mr Sutton said the tax change went against Australia's campaign on the world stage against market-distorting subsidies.

"It upsets the level playing field for Australian and New Zealand companies under CER. By all means, assist your local producers, but do it in a way that is consistent with the rules you have signed up to.

"It has long been an important element of our relationship that we don't handicap each others' companies when they're operating in our market. This key principle seems to have been overlooked in this latest decision."

Australia is the third most important destination for NZ wine exports and NZ is one of the two top suppliers of imported wines there. Currently nearly 100 wineries export to Australia and for the year ending 30 June 2003, exports amounted to 4.6 million litres valued at NZ$51.6 million.

Mr Sutton said New Zealand officials were working together with industry to decide what steps to take next.


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