Hayes John: Geographical Indications (Wine and Spirits)  Registration Bill — Second Reading 
Hayes John: Geographical Indications (Wine and Spirits)  Registration Bill — Second Reading 
[Volume:633;Page:4732] 
JOHN HAYES (National—Wairarapa) 
: 
 I thank my colleague from the Maori Party Pita Sharples for some thought-provoking comments. I valued his comments more than any other speaker’s today apart from my own colleague Mr McCully’s. Before I discuss elements of the Geographical Indications (Wine and Spirits) Registration Bill I would like to spare a thought for how we came to be discussing the bill. We are dealing with a plant that was imported—the grape plant—and with technology which was also imported to turn the product of that plant into wine. The arrival here of the plant and the technology was certainly much more recent than the arrival of our indigenous people. Naturally enough I want to look at this issue from a Wairarapa perspective. 
We are here today debating this bill because of people with vision—people who dug holes in stony pasture land in the Marlborough area in the Awatere Valley or in the Wairarapa to see whether the soil was suited to grapes. We are here because of people who had entrepreneurship—people like the late Tom Draper and for example our own colleague John Falloon to name just two. Then we needed people who invested in grapes and the marketing thereof. I think of the Riddiford family and also the Parkinsons in Martinborough in the Wairarapa. Then we had to bring in people who actually knew how to make the wine who had the technical skill to do it—people like Larry McKenna and Roger Parkinson. Those people and many others built the industry in this country from bare paddocks in Matahiwi Bideford Gladstone and Martinborough and yes in the Awatere Valley too. 
I have to report to the House that during consideration of the bill by the Foreign Affairs Defence and Trade Committee it astonished me to see the influence of bureaucrats on this process. Despite four or five submissions made by people in the industry the bureaucrats wanted to retain control. The Government has produced a bill that does that in clauses 51 and 52. But before I comment on those I will refer to the comments made by my colleague from New Zealand First Doug Woolerton. Clearly he knows nothing about this legislation and he has not talked to anybody at all in the industry. If he had he would know that the industry is desperate to get this bill into place. I can tell members that all of the winegrowers in the Wairarapa electorate are desperate for this legislation and have been pestering me for a long time to get this thing into place. 
I come back to Murray McCully’s comments. He talked about what a geographical indication is. It is an indication that identifies a wine or spirit as originating in the territory of a country or region. The Minister Judith Tizard read a very detailed brief but from her comments since then I think she has misunderstood how one decides what a geographical indication is. What one does is to look at things that give wine a particular quality reputation or characteristic when it is grown in a certain region. That includes climate aspect soil history geography and producer and consumer understandings. The boundaries in the names of the geographical indication follow the wine; the wine does not follow the name. It is really important to focus on that because that then leads to the issue of who is qualified to make the decision. I would argue that the people who are qualified to make the decision are people with knowledge of the relationship between the quality reputation and characteristics of wine and the region of origin. They would be persons with knowledge of international law on practices regarding geographical indications and the registrar of geographical indications who will have expertise in administrative aspects of the New Zealand legislation. 
But this bill is faulty because it leaves full control of decisions on geographical indications in the hands of a bureaucrat employed by the Ministry of Economic Development. That ministry is singularly inappropriate to do this work. Clause 52 proposes that the registrar must include on his committee the Surveyor-General. That is brilliant! Who is the Surveyor-General? What does he know about wine? Zip! The Surveyor-General knows how to put lines on a map but he does not know how to take a decision about what the geographical indication of a wine should be; he has no specific qualification whatsoever for that. The second person who must be on the committee according to our bureaucrats and the Labour Government is a member of the New Zealand Geographic Board who is not the Surveyor-General. That is someone who knows about names. What does that person know about wine? Nothing! 
I am astonished at the work of our bureaucracy and the advice that bureaucrats gave to the Labour Government—which has overridden submissions from the industry—that those people are competent. I can tell members they are not competent and in the Committee stage of the bill National will be opposing most strenuously their appointment. We need a committee of three by all means. It should be chaired by someone nominated by the industry it needs to be supported by another person nominated by the industry who knows something about wine and it should have a registrar-general there to deal with the administrative detail at the industry’s direction. This is not about control and it should not be about bureaucracy; it should be about doing something to help the industry which will help our exports and support the activities of many wine companies throughout New Zealand. 
I come to another area that really impacts on this industry and that is the issue of the plethora of red tape and regulation that our industry has to face and that the entrepreneurs in this industry have had to overcome to get a good product into the market. This Labour Government is taking about $130 million in excise tax imposed on growers. This money has to be paid before any of the wine is sold. I think this is an outrage and certainly it is impacting negatively on the winegrowers in my region. 
If we say “$130 million” fast enough it does not sound very much; it does not register or mean anything each time we buy a bottle of wine. But for the benefit of the chardonnay socialist Minister who comes from Auckland I say that she needs to realise that for a bottle of chardonnay costing $20 the Government retains $2.50 as GST then there is a retail margin of $3.78 and a distributor margin of $3.45. About $10.55 ends up with the wine producer exclusive of GST. This is on a $20 bottle of wine. Then from that $10.55 the chardonnay socialist Minister from Auckland takes a further $1.69 or about 16 percent of the money the vintner receives. This leaves the vintner who pays $2.60 or about 25 percent of the winery price for grape costs and another $2.49 or 23 percent for winemaking and packaging costs with about $3.77 or 36 percent of the vineyard price of the wine to cover overheads grape marketing and a return on capital. 
But a $20 bottle of wine is a super-premium wine. Most wine is cheaper so the impact is greater. This excise tax is a huge money-spinner for the Government. It is causing huge damage to small businesses in my electorate particularly in Martinborough and National intends to try to do something about that. Those growers however do support this bill subject to the modifications to clauses 51 and 52 which we will address in the Committee stage.