Latest / Best of Business / Jos Ruffell: Garage Project co-founder on how the Australian excise tax break impacts Kiwi brewers

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Jos Ruffell: Garage Project co-founder on how the Australian excise tax break impacts Kiwi brewers · Best of Business

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  Speaker 1: You're listening to a podcast from Newstalk ZB. Follow this
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  Speaker 2: Now, Kiwi brewers, as I was telling you the other day,
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  Speaker 2: Kiwi brewers are frustrated at the raw deal that they're
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  Speaker 2: getting in Australia at the moment. What is going on
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  Speaker 2: is that Aussie brewers of beer get a full tax
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  Speaker 2: rebate on the excise, but our brewers don't, and the
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  Speaker 2: dispute has dragged on for more than a decade. Joss
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  Speaker 2: Ruffell is one of the co-founders of Garage Project and
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  Speaker 2: with us. Hey, Joss.
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  Speaker 3: Hey, how are you doing?
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  Speaker 2: I'm very well, thank you. How much of a problem
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  Speaker 2: is this for you?
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  Speaker 3: This has become a huge problem for us. The excise
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  Speaker 3: rebate for Australian breweries is now $ 400, 000 Australian dollars a year.
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  Speaker 3: So collectively for just our brewery alone, we've paid $ 2. 5
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  Speaker 3: million of tax in Australia. We otherwise shouldn't have if
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  Speaker 3: this had been resolved earlier.
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  Speaker 2: They're doing it for the wine guys, right? And they've
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  Speaker 2: done it for 25 years for our wine guys, giving
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  Speaker 2: them the full tax rebate, why won't they do it
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  Speaker 2: for beer?
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  Speaker 3: So this was introduced for New Zealand wineries in 2004,
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  Speaker 3: the wet rebate. The beer excise remission came in in
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  Speaker 3: 2012 at a much lower level, but it has been
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  Speaker 3: increased over the subsequent decade to have parity for Australian wineries,
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  Speaker 3: distilleries and breweries who are all now receiving that $ 400, 000.
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  Speaker 3: So The real question is, you know, why aren't New
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  Speaker 3: Zealand distilleries and breweries also having access where New Zealand
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  Speaker 3: wineries are?
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  Speaker 2: Well, that's what I'm asking you, Joss.
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  Speaker 1: Why?
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  Speaker 3: Well, you know, MFAT's looked into this. It's a clear
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  Speaker 3: breach of CER. And we've had some really encouraging news
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  Speaker 3: in the last week where Minister Maclay has actually now
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  Speaker 3: raised this openly with his Australian counterpart. And he's acknowledged
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  Speaker 3: that there is a precedent with wine. So we are
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  Speaker 3: seeing progress. We just really want to see that. pressure
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  Speaker 3: applied and see some constructive discussions now turn into a saloon.
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  Speaker 2: In terms of export markets, where does Australia rate for you?
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  Speaker 3: It's our number one export market by far. We have
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  Speaker 3: a team on the ground in Melbourne. We have an office,
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  Speaker 3: a warehouse. This has essentially been an effective tariff on
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  Speaker 3: New Zealand beer. And we would have been in a
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  Speaker 3: position to actually invest more into that market if we'd
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  Speaker 3: been receiving the excised remission and playing on a level
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  Speaker 3: playing field with our Australian brewery counterparts. Yeah.
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  Speaker 2: I mean, if you guys got this money back, you
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  Speaker 2: would presumably go up. You'd be able to sell more,
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  Speaker 2: wouldn't you?
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  Speaker 3: Absolutely. We can invest in more employment in Australia. We
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  Speaker 3: could do more marketing promotion. That drives more production in
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  Speaker 3: New Zealand, more jobs back here. I mean, everyone wins.
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  Speaker 3: It's just a no-brainer that this needs to happen.
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  Speaker 2: You wouldn't cut the price?
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  Speaker 3: It's just a case of what's going to get done. Well,
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  Speaker 3: that's what we're facing in Australia is we're competing against
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  Speaker 3: breweries who have a $ 400, 000 head start and they can
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  Speaker 3: choose not to essentially put excise onto their beers when
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  Speaker 3: they sell it into the market. And as you know,
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  Speaker 3: excise has grown significantly in both Australia and New Zealand
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  Speaker 3: in the last few years. So that's a massive disadvantage
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  Speaker 3: for us. We're sort of fighting with one arm tied
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  Speaker 3: behind our back there.
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  Speaker 2: Do you reckon New Zealand beer is better than Aussie beer?
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  Speaker 3: I think, you know... One of the fantastic things about
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  Speaker 3: the Australian market, as you've seen with New Zealand wine
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  Speaker 3: and our beer, is they're not afraid to admit when
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  Speaker 3: they see quality. And they love New Zealand wine. They
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  Speaker 3: love New Zealand beer. And it's a fantastic thing.
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  Speaker 2: Yeah, I reckon you guys do a better product. By
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  Speaker 2: the way, are you going to do any more of
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  Speaker 2: End of the Golden Weather?
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  Speaker 3: Well, it's a beer that takes a long time to brew.
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  Speaker 3: And we have got a new batch coming through. But
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  Speaker 3: it takes years for a batch of End of the
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  Speaker 3: Golden Weather.
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  Speaker 2: How long does it take?
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  Speaker 3: Well, it's a wild beer, so it's a spontaneous fermentation.
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  Speaker 3: It's aged on central Otago fruit. It's more akin to
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  Speaker 3: a wine in some ways. It spends a lot of
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  Speaker 3: time in barrel.
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  Speaker 2: Yeah, but how long? How many years?
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  Speaker 3: We have beer in barrel for several years. We have
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  Speaker 3: some beers that take two, three, four years in barrel
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  Speaker 3: before they're ready.
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  Speaker 2: I mean, look, I'm getting really specific here. You might
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  Speaker 2: not know, but do you know when you did the
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  Speaker 2: last batch?
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  Speaker 3: Oh, the last batch? I don't remember. Two years ago.
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  Speaker 2: And are you doing it with apricots?
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  Speaker 3: Yeah, Central Otago fruit.
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  Speaker 2: Just so good. You know what? You've cheered me up immensely.
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  Speaker 2: I can't tell you how happy I am to hear
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  Speaker 2: there's more of this stuff coming. Joss, look after yourself
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  Speaker 2: and best of luck. Joss Ruffell, Garage Project co-founder.
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