THE PRESS SATURDAY, MAY 9, 1981. Import licensing rebottled

Press, 9 May 1981, Page 14

THE PRESS SATURDAY, MAY 9, 1981. Import licensing rebottled

Recent Government decisions that affect the importing of wines are unlikely to do mupK for the New Zealand consumer. The decisions will continue to protect the New Zealand winemaker and will benefit the retailer and wholesaler. The changes are also likely to sour talks between New Zealand and Australia over closer economic relations between the two countries. That aspect is . doubly unfortunate, not simply because recent events have strained the relationship between New Zealand and Australia but also because, if a new economic relationship should develop between the two, the consumers should have a great deal of the benefit.

The Minister of Trade and Industry, Mr Adams-Schneider, announced an end to import licensing for wine. Instead, a new system called a tariff quota will be used. This works by setting a limit on the wine to be imported at a certain tariff and then imposing a substantially increased tariff on quantities beyond the limit. The Minister of Customs, Mr Templeton, was left to give the details of the new categories. In brief, the wholesalers, who have been the traditional holders of import licences for liquor, will get their 1980-81 allocation and another 25 per cent; wine resellers, when legislation permits, will be able to get $2 million worth of imported wine among them. This will be allocated on a basis of 3.5 per cent of their basic sales of New Zealand wines, to which their stocks are at present restricted. The places at which imported wines will be available will thus be increased; the cards are stacked against the possibility that New Zealanders will have access to the very good Australian wines at a moderate price. Those who have had a chance to observe wine prices in the two countries will be aware that a threelitre cask selling in New Zealand for $l6 to $l7 can be bought in Australia for as little as $4. Under the new arrangement this imported wine will probably fall in the category of wine costing less than $2 a litre and therefore will be outside the new tariff quota and will attract a tariff of $4.85 a litre.

Those who study the new arrangement

might be excused for wondering whether import licensing has been abolished, as Mr Adams-Schneider said;, and, evehjf it has been abolished, they will wonder whether the new system is not as complex as import licensing. For Australia, a minor preference has been built into the whole system. Wines of certain categories attract a tariff and, on wines from most parts of the world, another 20 per cent is added to the tariff. For Australian wine, only 10 per cent is added. The result of all.this is that the present importers retain their right to import, and have an extra allocation, and resellers are going to be given quotas on a modest scale. Import licensing has been abolished in name, but hardly in practice. The impression has been created that the trade has been freed; little will be discernible to the public. Because of the 10 per cent preference, some orders which normally went elsewhere might go to Australia instead.

The timing is significant. Wine has become a bargaining point in the discussions between New Zealand and Australia about closer economic relations. New Zealand has been pressing for greater access for its dairy products to Australia. In return, according to what little information has slipped out, Australia looks to New Zealand to provide greater access for wheat, wine, and canned fruits. By announcing a new system now, New Zealand has gone some distance towards negating any special benefit both to Australian winemakers and to the New Zealand public. It is true that New Zealand winemakers have made great strides in recent years and that, had there been fierce competition from cheaper, imported wines, the wine industry here may not have been so firmly established. Eventually, local wines should be able to compete both in quality and in price, Under the new arrangement New Zealand winemakers will continue to have a privileged place in the New Zealand market — a position they will probably not hesitate to use to increase prices. In this event, the benefit to the consumer of closer economic relations will be lost.