It was fascinating to read yesterday that one of Australia’s largest family-owned wineries says tax breaks for smaller wine producers are now a big threat to the wine industry.
It’s a short article and well worth reading. The ABC news article quotes De Bortoli as saying the Wine Equalisation Tax (WET) is threatening mid-sized players by allowing uneconomic smaller producers to stay in business.
In this case, the idea that not only is the grass greener on the other side of the fence but the fertilizer that is making it so is poisoning your own lawn.
As Australian craft brewers continue their battle for a similar tax break for their industry, and as many commentators unquestioningly accept that a WET would be ‘good’ for the ‘industry’ as if good and industry are uniform and indivisible concepts, it is always worth bearing in mind that the benefit is always in the eyes of the receiver.
If you are a small wine maker, the WET tax is obviously a great benefit but, as companies grow and their turnover grows, that $500,000 becomes less and less significant overall and the overall benefits of it diminished. At the same time, these larger companies start to see the WET as harming their business by giving smaller players an unfair advantage and distorting the market against them. Of course, depending on your own situation, both positions can be perfectly correct.
I regularly see similar situations in the brewing industry. Brewers when small and struggling regularly complain about such things as tap contracts being anti-competitive and hurting their business. Yet, as breweries grow and become established and they win an increasing share of taps, such talk seems to diminish. It is nothing to then start hearing their smaller rivals complain of that same brewery offering to install taps in new venues, or offer incentives to get or retain regular taps. When they do, the larger ‘small’ breweries seem to always find it easy to justify the new business tactic. The business justification is very understandable…to everyone but some of the smaller breweries that can’t afford the same business arrangements.
What’s the point? None really, it’s just an interesting thing to observe and a reality check that what you view as good or right or fair really depends on where you stand. I would love to hear readers thoughts on it though….