The PFA wine thread

[Coastr]

A response to the OT direction of the 4 sale thread.

My question is...what are the problems the oz wine industry faces?

Everyone else just wants to talk about nice wines, I guess!

[Simonoz]

Coastr

I'm in the industry and don't know where to start about the problems.

With my growers hat on, I would say that we are not paid enough by the winemakers.

The winemakers would say that the consumers won't pay enough for their wine.

We both would say that the costs of production are too high, labour, taxes, et al.

The Managed Investment Schemes corrupted the whole system, and then that blew up courtesy of the GFC.

While that was going on, the wine industry in all it's forms dropped the ball on its overseas marketing, and then the dollar put the squeeze on overseas sales.

The latest problem has been the ATO picking on the city farmers, denying tax deductibility on vineyard development.

Bright idea (not), because it takes work away from all the local contractors who then suffer.

In the end, after years of involvement, I don't think any primary producer in Australia gets a fair go. Wine is just a part of that, with a bit more glamour thrown in.

Now, about the vineyard.

Ours is Cloudbank Estate, located in the Forest Grove/Karridale subregion of the Margaret River appellation.

We have a Facebook page which gives an idea of our property, and we produce on an organic basis although not certified.

Wendy's a dab hand on the camera so the page is worth a look for that alone.

Our grapes are placed with Si Vintners, and Snake & Herring, both young producers out to make their mark, and worth a try.

Halliday amongst others reviews them very highly, some over 95 points.

The southern end of Margaret River where we are located produces very good Chardonnay and Sauvignon Blanc grapes, although I also think our Cabernet is excellent.

I'd love to hear some feedback if any PFA'ers get the chance to try them out.

Salute!

[withers]

Simonoz, how many acres do you grow on?

[LeeM]

'The latest problem has been the ATO picking on the city farmers, denying tax deductibility on vineyard development.
Bright idea (not), because it takes work away from all the local contractors who then suffer'

 

You can't be serious??

That is just ridiculous!! The ATO really need to stop trying to kill everyone off, especially the wine industry!

Money grabbing bastards

[Coastr]

Interesting, I had forgotten about all the investment schemes. It's always a worry when people enter a market to harvest subsidies or tax breaks rather than a desire or interest in the industry itself. But it seems to be a lesson that is not learned.

It does surprise me I can buy wine cheaper per liter than milk ( admittedly, not great wine, but still). Remove the taxes off that and it is even more stark.

When travelling, I have noticed that Aus wines have a much smaller share of shelf than they did maybe ten years ago. That is probably the marketing/selling aspect being squeezed out by other countries.

[Mtheo72]

Simonoz,

As a retailer of wine (within an independant supermarket) I would have to agree with all of your points.

From purely a retail perspective I would make the observation that the wineries/agents/wholesalers have also assisted in the absolute destruction of their brand values via excessive deep ongoing discounting. Many brands that were only five years ago perceived as middle to upper market can now only be sold at give away prices. The wine industry can only hope that a certain soft drink company confines itself to the spirit/beer market. Well then again a supposedly great beer company worked wonders for the wine industry....

Cheers

Michael

[Simonoz]

Simonoz, how many acres do you grow on?

Amanda

We are on 120 acres of which 30 acres are vineyard in five sections. We have a brook running through, a large lake, and two large bush blocks so that is all the room we have.

Our vineyard is spaced at 2.5 metre rows, not the more usual-for-here spacing of 3 metres, so we produce a little more than usual for our area, about 70 tons per annum. That equates to $100,000 per annual income, and we spend at least that producing it, if only because we invest in new equipment as the need arises. Being organic means we try to minimise the number of times a foreign contractor comes on our property, to prevent bugs and disease being carried in. It also means we have to be able to manage the canopy of our vines very carefully to prevent crowding which promotes mildew. Mildew being the arch enemy. So we need good equipment, tractor, sprayer, trimmer, mowers, and so on. It's fair to say we have too much machinery for our size, but being organic means you don't get to choose really. The easier choice which we can't countenance would be to use chemicals, which obviates the need for some of the machinery but we just can't stand the thought of all that crap ending up in the river system. If you really want to scare yourself have a read about chlorpyrifos which is one of the farmers favourite chemicals. No one could ever drink milk or eat eggs with the same fervour any more, unless they are organic.

[Simonoz]

'The latest problem has been the ATO picking on the city farmers, denying tax deductibility on vineyard development.Bright idea (not), because it takes work away from all the local contractors who then suffer'

 

You can't be serious??

That is just ridiculous!! The ATO really need to stop trying to kill everyone off, especially the wine industry!

Money grabbing bastards

LeeM

It is serious.

The Financial Review posted an article about this some six months ago.

A Perth lawyer failed to win an Administrative Appeals Tribunal judgement when she tried to claim for her first years tax deductions on her new vineyard. Her case was paid for by the ATO as a test case as they were keen to set the standard. Had she spent her money quickly in the first three years (and how could she given the time it takes to get a vineyard up and running!) so that her vineyard broke even after six years they would have allowed her claim. However her expenditure was calculated to be made so that she broke even after ten years so she failed, as the ruling denied her claim.

In other words she failed because she took too long, in the ATO's opinion! As if they know anything about farming! Or finance. No consideration was given to how she was to raise the capital, in the current tough market either, just that she was taking too long.

I railed at my local MP's state and federal about the ATO's stance, on the basis that it would kill off farm investment and wipe out the local contractors who do all the work. Guess where it got me?

My finance background made it easy for.me to see the pitfalls in this decision, but until Barnaby Joyce raised the issue in the two weeks before parliament rose, not a word was heard from any wise men about this sleeping tiger.

My near farm neighbour, a Perth professional, got caught by it this year but through a different catch. Disallowed all claims. No interest, no expenses, nothing. On the basis that it's not his primary source of income, and that he doesn't turn over more than $50,000 (he rents his paddocks to his neighbour for grazing), while he develops his property. A different way of skinning the cat, but the result is the same. He stopped spending straight away, and his farm will hit the market. But guess what, no one will buy it because when they ask their Accountant if they should, they will get told that there is no reason to do so, and in fact it is better to buy a city rental property, non productive as it is. And we wonder why farming is stuffed? These decisions have hurt the property market for farms. To the point where it's 50 cents in the dollar at best if you sell. It's also a great time to buy, but only if you have the funds in your pocket, for the reasons above. You certainly can't borrow money, with the ATO looking over your shoulder like they are.

[edgy]

Great thread! 

 

 

 

Now, about the vineyard.
Ours is Cloudbank Estate, located in the Forest Grove/Karridale subregion of the Margaret River appellation.
We have a Facebook page which gives an idea of our property, and we produce on an organic basis although not certified.
Wendy's a dab hand on the camera so the page is worth a look for that alone.
Our grapes are placed with Si Vintners, and Snake & Herring, both young producers out to make their mark, and worth a try.
Halliday amongst others reviews them very highly, some over 95 points.
The southern end of Margaret River where we are located produces very good Chardonnay and Sauvignon Blanc grapes, although I also think our Cabernet is excellent.
I'd love to hear some feedback if any PFA'ers get the chance to try them out.
Salute!

 

Would love to try your Cabernet if you can point me in the direction of where to find in Sydney (or online).

 

We're a big fan of the Maergeret river cabernets! 

[Coastr]

The ato has gone a bit feral of late.  I read recently about a refusal to hand out ABNs to contractors, which is not the job of the ATO.  A worrying trend has been the recasting of language where a legitimate tax deduction has become a 'subsidy' and any increase in taxes has become a 'saving'.  this is worst when it comes to the refund of taxes on diesel fuel for farming and mining activity, where the use has nothing to do with road use.  what was previously a tax exempt activity has become a tax refund has become a subsidy. Once it is called a subsidy, then people will clamour for its removal.  IMO there is a very real possibility of being faced with diesel road use tax payments for their tractors, harvester, excavators and other equipment.  I have met many people who parrot the line that farmers and miners are all subsidised, and when questioned further, the diesel tax rebate is always the first thing they bring up.

 

More evidence of this is the line that has been fed to young people that houses are explain e because of negative gearing, and that it is a subsidy for property owners.   As noted, whether an inner city apartment or winery, if expenses are incurred in the production of income, then that is a legitimate tax deduction.  Meddle with that basic core principle at your peril.

 

As you say, the ATO has no clue about busniness, but they seem to increasingly see all revenue as theirs, and they deign to let income producers keep some, as long as they behave.

 

+1 on spruiking your wine.  I don't think the mods would really mind.

[withers]

Amanda

We are on 120 acres of which 30 acres are vineyard in five sections. We have a brook running through, a large lake, and two large bush blocks so that is all the room we have.

Our vineyard is spaced at 2.5 metre rows, not the more usual-for-here spacing of 3 metres, so we produce a little more than usual for our area, about 70 tons per annum. That equates to $100,000 per annual income, and we spend at least that producing it, if only because we invest in new equipment as the need arises. Being organic means we try to minimise the number of times a foreign contractor comes on our property, to prevent bugs and disease being carried in. It also means we have to be able to manage the canopy of our vines very carefully to prevent crowding which promotes mildew. Mildew being the arch enemy. So we need good equipment, tractor, sprayer, trimmer, mowers, and so on. It's fair to say we have too much machinery for our size, but being organic means you don't get to choose really. The easier choice which we can't countenance would be to use chemicals, which obviates the need for some of the machinery but we just can't stand the thought of all that crap ending up in the river system. If you really want to scare yourself have a read about chlorpyrifos which is one of the farmers favourite chemicals. No one could ever drink milk or eat eggs with the same fervour any more, unless they are organic.

 

That sounds very impressive Simon, a lot of hard work too.  I had no idea farmers were getting sooo screwed over.

 

On the chemicals -   My uncle used to be involved  in fruit industries up in Mildura area and he used to always warn us about the chemicals used on the fruit - Oranges especially.  Said it was incredibly toxic... he would never eat any of the fruit he was involved in growing.  Ever.. period!   Pretty scary when you see people not eating their own fruit etc 

[reax]

I support the small winemakers when I was living in Newcastle .. Small plug for http://www.smallwinemakers.com.au . But yes the wine industry is definitely not in a nice place. I will definitely be looking at simonoz wines as I am always on the lookout for other small producers that produce significantly better wines than the big companies.

[withers]

yes I agree reax... I'm a fan of those euro weiss beers and even after reading this thread, I'll be supporting local craft beers from now on. No more buying from OS unless I'm OS!

[reax]

Amanda.. Murray's brewing. Shawn Sherlock was awarded craft brewer of the year. You should try some of there beers. To keep thread on topic, there is also a winery there as well.