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Australian wine makers may not like it but Kiwi wine exporters are getting rebates amounting to $20 million in tax rebates from the Australian government.

Australia introduced rebates on its 29% Wine Equalisation Tax (WET) to Australian wineries in 2004, raising concerns in New Zealand that wine from this side of the Tasman was having to compete on an uneven playing field — contrary to the intent of the bilateral closer economic relations (CER) treaty, according to an online report from Voxy.co.nz.

The rebate was extended to NZ companies after then trade negotiations minister Jim Sutton complained the rebates were effectively a subsidy for Australian winegrowers.

At the time, nearly 100 NZ wineries exported to Australia and for the year to June 2003, exports amounted to 4.6 million litres valued at $51.6 million. Since then, the volume of NZ wine sold in Australia has increased tenfold, with the annual value now over $323m. Last year’s 51% jump in exports to Australia included a significant lift in the amount of bulk wine — which attracts the same rebate as bottled product, the report says.

Winemakers’ Federation of Australia chief executive Stephen Strachan said this week that many local producers were vehemently opposed to NZ wineries receiving the rebate, but the terms of the CER deal meant that NZ wine sold on the other side of the Tasman was eligible.

Philip Gregan of Winegrowers New Zealand, told wire agency, NZPA, that something in the order of  $20m was coming back to New Zealand.

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