DISTILLED SPIRITS DISCUSSION PAPER. Hon David Ridgway mlc Shadow Minister for Agriculture, Food and Fisheries

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1 DISTILLED SPIRITS DISCUSSION PAPER 2015 Hon David Ridgway mlc Shadow Minister for Agriculture, Food and Fisheries Shadow Minister for Tourism Shadow Minister for Forests

> INTRODUCTION hon David Ridgway mlc Australia s distilled spirits industry has a really exciting future ahead, with steady growth over the past few decades building a foundation for new

Our reputation for producing high quality food and beverage products in a pristine and safe environment means we are well placed to meet this demand.

2 > INTRODUCTION hon David Ridgway mlc Australia s distilled spirits industry has a really exciting future ahead, with steady growth over the past few decades building a foundation for new opportunities emerging in the growing domestic and global markets. Our reputation for producing high quality food and beverage products in a pristine and safe environment means we are well placed to meet this demand. Over the last few years, we have seen the industry enjoy some genuinely impressive achievements. However, in order for the industry to reach its full potential, more needs to be done to remove the barriers to growth and competitiveness. I am pleased to launch this discussion paper to learn your views on barriers that are slowing the growth of your business, but also on how we can address particular aspects of the industry to growth the industry as a whole. We want to hear your perspective on what needs to change in order to see this promising industry reach its full potential. Hon David Ridgway MLC Shadow Minister for Agriculture Food and Fisheries Shadow Minister for Tourism Shadow Minister for Forests 2

> AUSTRALIA S DISTILLED SPIRITS INDUSTRY Australia s burgeoning distilled spirits industry presents a unique opportunity for growth in both our food and wine and tourism sectors.

3 > AUSTRALIA S DISTILLED SPIRITS INDUSTRY Australia s burgeoning distilled spirits industry presents a unique opportunity for growth in both our food and wine and tourism sectors. By bringing first-class locally-grown feedstocks (including grains, grapes and other fruits) together with world-renowned distilling capabilities and decades of experience in related industries (such as oenology, coopering and food science research), Australian producers have unprecedented opportunities for capitalising on growth in demand for distilled spirits. Although the opportunities available to the Australian industry are significant, there are substantial barriers that are inhibiting the industry s potential for growth. If the Australian industry is to reach its full potential, these barriers must be addressed to foster and encourage our industry to grow and capitalise on global demand. 3

4 > What this discussion paper seeks to achieve This discussion paper provides a starting point for conversations between industry participants about the barriers that are preventing the Australian distilled spirits industry from reaching its full potential, as well as potential solutions for removing these barriers. Key objectives of the discussion paper and associated consultation process include: Identifying the key barriers that reduce industry participants competitiveness or slow their entry into the market Uncovering areas for further research and opportunities for industry to work with researchers to further enhance their products and production techniques Understanding the supply chain and identifying where gaps may exist; for example, the depth of the labour market for engineers and related services and the availability of key manufacturing equipment and capabilities Educating key decision-makers and regulators about the potential of the industry and the barriers which need to be removed in order for this potential to be realised Exploring potential solutions for the removal of these barriers - in partnership between industry participants and decision-makers. Submissions on the discussion paper will be consolidated into a comprehensive set of issues affecting the industry, barriers to be addressed and solutions on offer. This information will inform detailed discussions at the Australian Distilled Spirits Forum, to be held in Adelaide on Wednesday 5 August, with all respondents invited to register to attend. 4

5 > Types of barriers under consideration Earlier consultations have revealed a range of issues which are inhibiting the industry s potential and individual producers ability to establish their operations in a timely fashion and sustain them through the start-up phase. These issues are summarised below to assist stakeholders in understanding the types of barriers that are to be identified. Respondents to the discussion paper are encouraged to consider areas of regulation and other barriers which they have found to be particularly onerous, as well as regulations that have become outdated in relation to current industry standards and community expectations. Respondents are also asked to consider areas where more can be done to help producers improve the quality of their products and access to new markets through better collaboration with researchers and industry partners. Examples of the types of issues raised to date include: Liquor licensing requirements Inconsistencies between states and territories with respect to liquor licensing requirements for producers (and the industry more broadly) Requirements specific to particular jurisdictions, with examples including (but not limited to): Bottlers having to obtain a producer s licence despite the fact they do not produce an alcoholic beverage Start-up businesses operating under a producer s licence being unable to sell other producers spirits, ruling out the opportunity to generate critical early cash flow while their product matures Linkages between the industry and researchers The low level of interaction between industry and research organisations and the lack of synergies realised between existing world-class oenology departments, other research institutions and commercial distilleries The lack of any form of centre of excellence for distilled spirits in Australia 5

6 > Types of barriers under consideration Proximity of supply chains and access to supporting industries Availability of key manufacturing and engineering inputs to production The types of skills needed within the industry itself as well as supporting industries Appellation controls and brand positioning Whether the industry needs specific definitions for products categories The possibilities and challenges of exclusive regional branding of Australian or regional spirits products Excise and taxation Overly onerous requirements regarding the bonded storage of distilled spirits and distillation equipment The timing of excise payments being made relative to the timing of producers receiving payment from their customers The concept of excise relief has been covered extensively in a range of consultations with a variety of stakeholders; excise relief is not a focus of this discussion paper, although it is acknowledged as being of interest to many stakeholders. 6

> Join the conversation Industry participants and stakeholders are encouraged to provide their views by making a submission on the discussion paper. Submissions can be lodged via ADSDP@parliament. sa.

7 > Join the conversation Industry participants and stakeholders are encouraged to provide their views by making a submission on the discussion paper. Submissions can be lodged via ADSDP@parliament. sa.gov.au, with submissions closing 5:00pm Friday 17 July Shadow Minister for Agriculture, Food and Fisheries David Ridgway will also be hosting an Australian Distilled Spirits Forum on Wednesday 5th August 2015 to discuss the findings from submissions on the discussion paper and to explore potential solutions to the barriers identified. Any queries may be directed to his office. Office of the Honourable David Ridgway Leader of the Opposition, Legislative Council Shadow Minister for Agriculture, Food and Fisheries Shadow Minister for Tourism Shadow Minister for Forests Phone: (08) Web: Facebook: facebook.com/davidridgwaymlc Parliament House, North Terrace ADELAIDE SA

8 > Australian Distilled Spirits Forum Shadow Minister for Agriculture, Food and Fisheries David Ridgway will be hosting an Australian Distilled Spirits Forum on Wednesday 5 th August 2015 to verify the findings from submissions made on the discussion paper with industry and to explore potential solutions to the barriers identified. Date: Wednesday 5 th August 2015 Register your attendance at ADSDP@parliament.sa.gov.au 8

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