Wine Bill

I move, That the Wine Bill be now read a second time. The purposes of the bill have always been quite straightforward. They are to have legislation that protects the interests of consumers and the reputation of New Zealand wine. At the same time the legislation has to be sufficiently robust and enforceable to protect producers from the protectionist technical barriers that are a reality of life in the international trading environment of the 21st century.

The Wine Bill was referred to the Primary Production Committee on 17 October last year. Since then the committee has undertaken a great deal of work on the bill. In response to the urgent need to enhance our regulatory export regime, the committee divided Part 5 out of the bill and reported it back as the Wine Makers Amendment Bill in early December last year. That bill was enacted in March this year. It was aimed at maintaining access to overseas markets, particularly the European Union, in the period leading up to the passage and commencement of this legislation. Once the committee had divided out Part 5, it sought submissions on the remainder of the bill. Submissions were received from last December through to May this year.

Many submissions reflected an old mindset toward the regulation of the making and exporting of wine. They concentrated on seeking to reduce compliance costs and minimise regulatory powers. The committee had the difficult task of reconciling the industry’s need for a legally enforceable regime, primarily around standards and exports, with submitters’ requests for a narrow regulatory regime. Submissions focused on five key issues, those being the definition of “wine”, limiting the types of standards that can be set under the bill, the simplification of wine standards management plans, the removal of compliance orders, and improving the consultation requirements.

Submitters sought clarification of the definitions of wines in the bill. In particular, they sought definitions that are consistent with the definitions of the types of wine in the New Zealand food standards. That makes sense, as does providing a means of updating those definitions to maintain consistency with the definitions in the food standards. I support the committee’s recommendation to insert new definitions and an ability to change them by Order in Council, to reflect any changes in the definitions in the New Zealand food standards.

Winemakers were concerned that the bill appeared to allow a whole raft of wine standards to be set. That is not what was intended. Instead, it was intended to enable some wine standards to cross-reference relevant food standards, so as to create a single regime for both wine standards and relevant food standards. The committee proposed a clearer means of achieving the outcome of a single regime for wine standards and relevant food standards. It recommends two key amendments to the bill. The first is to amend clause 14(2)(e)(i) to clearly and directly reference New Zealand food standards. That has the effect of making wine standards management plans, which are the key compliance regime within the bill, also about compliance with the relevant food standards. The second amendment is consequential. It removes clause 33(2)(a) to (i), which effectively repeats the scope of the New Zealand food standards.

The third key issue, simplification of the wine standards management plans, arose from winemakers thinking that their wine standards management plans would be markedly different from each others and would need to be highly complex, which would therefore increase the compliance costs. These plans are the key compliance regime for wine standards, relevant food standards, and relevant export requirements. I want to allay that concern. Wine standards management plans are expected to be comparatively simple documents. The industry should be able to develop templates, as provided for in the bill, which would allow individual wineries to apply the templates to their businesses. The committee has taken that on board, and has recommended no amendments in respect of wine standards management plans beyond technical amendments and the amendment to clause 14(2)(e)(i), which I referred to earlier. I support that decision.

The fourth key issue was the removal of the clauses relating to compliance orders. Submitters sought to remove those clauses as they saw them as bureaucratic and unnecessary, given the other enforcement powers in the bill. However, those other powers are significantly more severe than compliance orders. They include prosecutions, suspension of winemaking operations, and deregistration of wine standards management plans. As the bill requires all winemakers to have a registered wine standards management plan, deregistration would preclude the winemaker from being able to make wine legally for sale in New Zealand, which would clearly be a disastrous state of affairs. The industry sought strict enforcement, not the safer approach that compliance orders would give. Compliance orders are a useful enforcement tool, but removing them would not undermine the integrity of the bill. I therefore accept the committee’s recommendation that the clauses providing for, and relating to, compliance orders be removed from the bill.

Finally, submitters sought amendments to the bill to highlight and extend the nature of consultation under the bill. Submitters saw strengthened consultation requirements as a solution to their concerns about the nature and extent of the regulations and director-general’s notices that could be issued under the legislation. Submitters sought three key amendments in that respect: first, a new objective recognising consultation as an aid to fostering the efficiency and growth of the industry; second, an application of the consultation requirements in clause 128 to the making of all regulations under the bill; and third, the insertion of a principle of consultation at the front of the bill, or, alternatively, a shifting of clause 128 to the front of the bill. The committee has recommended amending the bill in respect of the first two of those proposals, and is against inserting a new principle-of-consultation clause or shifting clause 128. I agree with that view. Making the promotion of consultation with the industry on regulation of the industry an objective of the bill is a key amendment proposed by the committee. It highlights the need for the New Zealand Food Safety Authority to work with the wine industry to achieve a successful win-win outcome for both the Government and the industry.

I would like to thank the Primary Production Committee for considering this bill so thoroughly, and for reporting it back on Tuesday, 19 August with amendments that both improve and clarify the bill. I commend this bill to the House.

Yes, I think that by the time the bill finally came back to the House it was a win-win for all concerned, but I do not think the Minister of Agriculture can take any credit for that. A huge amount of hard work was done by officials, the Wine Institute of New Zealand—and I will refer to that shortly—and the members of the Primary Production Committee, who tidied up what was an ill-prepared bill at the time it was given to the select committee.

I want to pay tribute to the New Zealand wine industry. We heard during submissions that the industry currently exports about $250 million of wine, and that figure is predicted to nearly triple over the next few years. I think all New Zealanders take pride in the reputation that our wine has achieved right around the globe. I take this opportunity to pay tribute to this industry, which is earning a lot of export dollars for our country, and is doing so because the people involved are entrepreneurial. They just want to get on with it.

The evidence before the select committee showed me how diverse this industry is. Yes, there are one or two quite large players in the industry, but most of the people involved in it are relatively small operators of boutique wineries who “eager out” markets for themselves, both here and overseas—

💬 Rodney Hide: And it all tastes great.

Well, no. I think we had evidence before us—not enough, I might add—that some wines taste excellent and some will improve with age. I think that is the politest way one can say it. Anyway, I do not want to be diverted, because this bill is very serious legislation, and if we move quickly through it tonight, there might be a chance to enjoy some New Zealand product before the end of it.

The point I want to make about the diversity of the industry is that it operates in a tough environment, and these people do not want to be stressed by a whole lot of additional costs in compliance. I guess the submitters, in total, were saying to us that the bill as presented to the select committee was a complete overreaction. It was a bureaucratic nightmare, which resulted in the number of submitters totalling 115, and I do not recall any who were supportive of the legislation as it was referred to the select committee.

I have to say the timing of the calling of submissions could not have been worse, because there was huge anti-Government feeling and a lack of trust on the part of the industry. At the same time that we were receiving those submissions, Mr Anderton had convinced his—

💬 Rodney Hide: Oh, he’s an idiot.

I could not possibly comment. Mr Anderton had convinced Mr Sutton that it was time to impose a sneaky little excise tax totalling $18 million. It was in that environment that we had to deal with 115 submitters who were angry with the Government. They were angry quite justifiably—Mr Sutton is nodding his head; he regrets that move—and they were angry for two reasons. The No. 1 reason was that Mr Anderton had only just written a letter to the industry saying there would be no more sneaky taxes, and promising to consult. Darren Hughes is hanging his head in shame because he knows how honest Mr Anderton is; he has to work with him. But, sadly, the industry briefly trusted Mr Anderton, who had signed that letter. I doubt whether that will happen again.

The second point I want to make is that the tax the Government imposed was on beverages of 14 to 23 percent alcohol in content—namely, ports and sherries.

💬 Darren Hughes: It’s a bit like your poll rating.

I challenge Mr Hughes as the young baby of the House to listen to this. Mr Hughes stood in the House and said that the Government needed to do that because young people were drinking sherry and port. I say to Mr Hughes that he should get out there, go down to Courtenay Place with Winston Peters, and have a look. The young people are not drinking sherry and they are not drinking port. There was no need for that tax to be passed. That was the climate created by the Government, and the problem handled by the select committee as we beavered away to tidy up Mr Sutton’s mess.

The bill was certainly overkill when we first saw it. The difficulty we had was that the officials who came before us said they had consulted the industry and the bill had widespread support. Well, if it had widespread support, why did we have so many angry winemakers come before us? We scratched our heads for a while thinking about the best way round it. I will not say the answer was the chairman’s idea, but I guess it probably was. We came up with—

💬 Darren Hughes: Who is the chairman of that committee?

Darren Hughes can take a call and he can let the House know who the chairman is. We came up with the brilliant idea of saying we needed some help from the industry, and we appointed Mr Philip Gregan of New Zealand Winegrowers, previously known as the Wine Institute, to come along as a special adviser and work closely and collegially with the officials to see whether we could find a way through the mess that Mr Sutton had handed to us. We should not have had to do that. That work should have been done before the bill was ever presented to us. But I have to say that, because of the way the process then worked, we are now presenting legislation back to the House that is hugely more acceptable to the industry than it was. We were able to iron out some of the wrinkles. We were able to achieve what I think the industry will find is far better legislation with which to operate.

I implore the Minister, if he is working with an industry such as this again, to take some time to listen. We have just had the debacle about the flatulence tax, where the Minister blindly called farmers whingers and moaners, then half-heartedly had to back down. But there is never an apology from that Minister to say he got it wrong. In the case of the Wine Bill, there is absolutely no doubt that he got it wrong.

Mr Sutton referred to the changes we made, and I will talk quite specifically to those as we work through the Committee stage later on.

The point I want to talk about is that Mr Sutton made a comment regarding the changes to the compliance orders, and the fact we have now imposed a far more drastic regime on the industry. I think Mr Sutton needs that to be explained to him. The solution to a bad operation is now more drastic than it was because that is what the industry wanted. The industry told us that it did not want some mealy-mouthed, bureaucratic regime—[Interruption] Sorry, Mr Sutton? No, his interjection has run out of steam already. The industry did not want some mealy-mouthed, bureaucratic process by which a bad operator could continue to damage the industry. The industry said that if a guy operating in the wine industry was not operating professionally and safely, then the industry wanted that person out of the game altogether. The committee supported that argument, because we do not want anything done within the industry to damage the hard work that has gone into creating this now very significant export industry.

I conclude by paying tribute to Mr Philip Gregan for the work he did.

💬 Phil Heatley: Phil Heatley.

No, Phil Heatley can take his own praise. Mr Gregan travelled down here on a regular basis, at times at short notice, as we worked through this issue on our agenda, amongst a lot of other work. The spirit with which he was received by the committee, his work with the officials, and the advice we collectively got mean I can certainly support with pride this legislation coming back into the House tonight. I think it was a very good process and one that, in the future, other select committees could look at using. When legislation required by an industry creates so much angst at the start, we parliamentarians need at least to try to find a way to work through it in a select committee process so that what is passed has a great deal more acceptability than what was first presented to the select committee.

I raise a point of order, Madam Speaker. I did not want to interrupt Mr Carter, but while he was on his feet the Government whip Mr David Benson-Pope gave me an obscene gesture with his finger, by sticking his finger up then pretending to push it up his nose. I took grave exception to that and I suggest that he be asked to withdraw and apologise.

I did not make an obscene gesture to Mr Hide. That is a totally offensive suggestion.

💬 Madam DEPUTY SPEAKER: The member’s word is accepted.

I raise a point of order, Madam Speaker. Whose word is accepted—Mr Benson-Pope’s or mine?

💬 Madam DEPUTY SPEAKER: The member knows very well that when members are asked, their words are accepted.

Well, we know what sort of man David Benson-Pope is now.

💬 Madam DEPUTY SPEAKER: Mr Hide, that is completely out of order, and I warn you that when I have made a ruling on a point of order, it is not for you to comment on it—it is final.

I am pleased to rise in support of the bill. I think one of the key issues about the Wine Bill is that it is a response that the Government has made in cooperation with the industry, and was initiated at the request of the industry. No one in this country would be unaware of the extraordinary value and level of sophistication of the wine industry in this country, particularly in the last two decades. This bill will ensure that the excellent international reputation of New Zealand export wine is maintained, and that the standards we are forced to set by mechanisms that operate elsewhere are well and truly met. I commend it to the House for rapid passage.

New Zealand First will be supporting this bill. I want to thank the officials, and I want to thank the select committee chair. He did speak about himself—I thought he would be far more modest than that—but I had it in mind to congratulate him. The bill was in some difficulty. It was looked on with not only distaste but also suspicion by the industry, which thought it far too heavy-handed. It was at the chairman’s suggestion that Mr Philip Gregan worked alongside the officials, and I thank the officials for accepting that and working with him in the manner they did. They were able to overcome the distrust and suspicion, and I believe they worked for what we all want, which is good law.

💬 Phil Heatley: Good wine.

R DOUG WOOLERTON: And good wine, as the interjector said. The industry sought this bill. It is concerned that things are tightening up. It faced tariffs and non-tariff barriers in countries it exports to. It was with those threats hanging over its head that the industry sought this bill and sought some regulation. The wine standards management plans take the place of several other Government impositions that the industry has had to fulfil, so they are not the burden that one might at first glance expect them to be.

The industry, through Mr Philip Gregan—a man who must be admired, and certainly is admired by myself; he has seven women and no other men on his staff, and runs a fine operation, as one would expect—in many cases came up with the ideas that have been put in this bill. Mr Gregan was the one who went back to his members and saw the changes through. He did not always agree with them, and in the beginning he rarely agreed. I am sure the officials took him through them very carefully, and they came out with a consensus. This made the work of the committee very easy, even though we were working in a short time frame.

My colleague Dail Jones hails from a winegrowing area, and has many good friends among the Dalmatian community, many of whom were founders—and we will not mention what that shows about Mr Dail Jones’ age—of the wine industry. He said in his first reading speech that changes needed to be made to the bill, and those changes have, by and large, been made. Because he is a lawyer I will bow to his superior knowledge of technical matters, and he will speak on those changes in the Committee stage of this bill. Suffice to say, he had the wisdom to foresee what was wrong with the bill, he talked of those changes in his speech, and those changes have come to pass.

Much has been made of the size of the wine industry, but it pays to get it into perspective. It is still a small and emerging industry by world standards. It is still a small and emerging industry by dairy industry and meat industry standards. But it is a hugely important industry because it is undertaken in places where pastoral farming is, shall we say, more difficult than in other parts of New Zealand. It is a nice, niche market that we can extract out of our land-based products in New Zealand. It is a niche market in the world market, as well. It is very important from that perspective.

It is important as an emerging market, because it is seen as a sophisticated industry. I do not quite know how that comes to pass. I hail from the dairy industry, and I think that is a hugely sophisticated industry. The wine industry sees itself as the epitome of sophistication. When we listened to Mr Gerry Eckhoff, we almost felt that wine took on magical powers. I have been witness to wine producing magical powers in people in the dead of night, but I have not been witness to that magical transformation in a stone cold sober member of a select committee. Mr Eckhoff knows a lot about this subject, and we see from his minority report that he abhorred and saw as a sin that this industry should take on any form of regulation, should have to conform to any standards whatsoever, and should, in any way, have to be anything other than a magical product of the grape the mysteries of which nobody would even attempt to unravel. Mr Eckhoff’s minority report springs from that basis. It will be no surprise to you, Madam Speaker, or to members to hear me say I think his minority report is a load of rubbish.

💬 Hon Jim Sutton: An invasion of property rights.

R DOUG WOOLERTON: That is right. He did not mention property rights as far as this issue was concerned, but we heard a lot about boutique wineries in Otago. Whether that added to the debate was debatable.

The wine industry is very important. It is an emerging industry. It is an industry that we have to nurture. It is an industry of the future. It is an industry that fits with all the agricultural products that we produce so well in this country. I commend the bill. I even want to say a kind word about my colleagues from the other parties. We worked for a common cause, and I believe that we have come up with a very sensible bill that does away with a lot of overly bureaucratic nonsense. I believe that it will work well within the industry, and I believe that it has the industry’s backing.

I would like to start my contribution this evening by thanking the officials who are here tonight. They undertook a very long and involved consultation process, and when they got to the select committee they found that, basically, they had to redo it. In my opinion, they did an outstanding job, and I do give my sincere thanks to them. However, I give them a small word of advice. If they were the ones who were responsible for the Supplementary Order Paper arriving on my desk at about 11 o’clock this morning, then they should try getting it there a bit earlier next time if they want me to support it.

I would also like to express my gratitude to Philip Gregan, the Chief Executive Officer of New Zealand Winegrowers. My other colleagues have mentioned his contribution, as well. I think he brought a degree of rational debate to the whole discussion we had around the bill, simply because of his depth of knowledge. He was able to bring the views, at least of the bigger players in the industry, to the officials and into the select committee.

I see the Wine Bill as being a very positive expression of democracy in action. The wine industry wanted to integrate its activities into a single legislative framework, and basically this is what we have done. We have a regime that provides certainty for the industry. The industry wanted certainty in areas like the standards of production, exports, compliance enforcement, and industry-good funding.

The bill has a number of objectives, and my colleagues have mentioned a number of them. I would like to focus on just one this evening—that is, the setting of standards for identity, labelling, and the safety of wine. The wine standards management plan, or “WSMP”, as we came to know it as, lies at the very heart of the structure of this bill. It probably has its genesis in the Coopers Creek fiasco, which was a mislabelling exercise that occurred a few years ago. Coopers Creek was found guilty of placing gold medal labels on vastly inferior wine of the same variety, but not the actual wine that won the gold medal. In that case, the actions of a very few people quite explicitly undermined the whole industry—up to that point anyway—and the quite extraordinarily cooperative behaviour that was exhibited across the industry.

The ramifications of the actions of those few people have rumbled on through the years, and I think that this bill is a logical consequence of what happened all those years ago. I guess one of the ramifications that was unexpected by Coopers Creek at the time was that it made the winemaker famous. When he came to sell his label rights not long ago, he did exceptionally well out of it, financially. The industry has made its reputation worldwide by focusing single-mindedly on quality. That, I believe, is a very clear message for the rest of the agricultural industry. We should concentrate very closely on quality, as, with the possible exception of the milk solids dairy industry, New Zealand can never compete in a commodity market. We have to be a niche player. We will always be a minnow in agricultural terms.

Just as a very incidental point, I cannot resist saying that we need to be free of genetically engineered organisms for precisely that reason, which is exactly the position the wine industry is taking. It is my opinion that we are best to concentrate on the top end of the market, and that is what the wine industry already does. We already have very good market acceptance in all our premium markets.

So it is into this scenario that the wine standards management plan is designed to fit. Its intention, or its design, is to encourage all growers to comply with this overarching quest for quality, and, at the same time, provide a disincentive in terms of a compliance regime for those who may consider that their best interests are served by not complying. The wine standards management plan is a scaffold, a skeleton, around which the wine is created. Each management plan can be individually created by the winemaker or by his or her company. Equally though, it can be based on a template or a model that is more generic in nature. The whole idea of the wine standards management plan is that it is designed to identify, control, manage, and eliminate—or at least minimise—the hazards and other risk factors in relation to the making of wine, and therefore to ensure that it is fit for its intended purpose. Once a wine standards management plan is constructed by the winemaker or the company, it then has to be approved by the director-general of the Ministry of Agriculture and Forestry. It is then this plan that the winery works to in the creation of its wine.

I must confess that I really like the idea of management plans. On the one hand they do create a uniformity of process—keeping records, and things like that—that focuses on quality, so there is an underlying quest for quality that the management plans encourage. On the other hand, the management plans behave in an enabling way. They enable winemakers, within this structure, to be creative in the making of their wines. It is a bit like saying it does not matter what language we speak, we can still make a speech—but let us not go down that road.

R Doug Woolerton: In this Parliament.

In this Parliament we can, in any language. The wine standards management plans simply ensure that human health and safety is upheld, that the manufacture of the wine is traceable and accountable, and that the wine contains no unsafe ingredients.

Another aspect of this bill is that which refers to labelling. There has been quite a controversy around labelling, and I guess that dates back to Coopers Creek, as well. The bill provides empowering provisions that set New Zealand’s standards by regulation. The regulations do not change what is on the label of New Zealand wine but it does change how the information on the label is verified, and that is an important distinction. The wine industry was probably in an unusual situation, in that it approached the Government to increase the controls over the whole of the winemaking process. Usually people come to us, wanting to decrease controls. The wine industry actively wants to have more on the wine labels, in terms of accountability. They want labels to reflect information like the country of origin—obviously New Zealand - made—the region where the wine is made; the variety of the wine, whether it is Chardonnay, Sauvignon Blanc, Pinot Gris, Pinot Noir, or whatever; the vintage of the wine, which is the year it was made; and a whole range of other things. What the industry clearly wants is maximised information. It manifestly does not want a recurrence of the Coopers Creek fiasco.

I cannot let pass this opportunity to mention levies. A lot of submitters were opposed to the idea that this legislation would enable levies for cost recovery to be imposed. Their claim—and I have some sympathy for it—was that they already pay huge amounts in excise tax. The Hon David Carter mentioned the problems we have had with the increase in tax on port, sherry, and other fortified wines—by mistake, in effect. Although I have some sympathy with small winemakers not wanting to be lumbered with compliance costs and having increased levies, we do have to look at the reality of the wine industry—that is, its primary function is to produce alcohol. Although alcohol can be argued to be fairly harmless when taken in moderation—and I must admit I am a great contributor to the industry on the consumption side—

R Doug Woolerton: Are you a wine buff?

On occasions I have been known to—

R Doug Woolerton: Imbibe.

—imbibe, yes. It is certainly my recreational drug of choice.

💬 Marc Alexander: Do you swallow?

Yes, I do swallow. The fact remains that alcohol can have very negative impacts on our society. I am thinking in terms of alcoholism for some people who cannot control their desire for alcohol, and, of course, in terms of its being a lead-up to car crashes and death by accident.

This is common-sense legislation. It started off as being very complex legislation and will probably finish up as being pretty complex, as well. But it is certainly a lot better, a lot clearer, and a lot simpler now than it was when it first came before the select committee. The Greens take great pleasure in supporting the legislation.

Let me begin by stating what I think most people would surely agree with, and that is that the growth of the New Zealand wine industry is one of this country’s success stories. The figures I am aware of reinforce this—over $300 million worth of wine is exported today, compared with just $30 million worth 10 years ago. That is a phenomenal increase, and it must surely set a benchmark for other industries. Few, if any, industries I am aware of can so ably compete in such a saturated, competitive international market as the New Zealand wine industry has done.

💬 Dail Jones: I raise a point of order, Madam Speaker. There is a buzz around the Chamber, and I am having difficulty hearing the speaker.

💬 Madam DEPUTY SPEAKER: This has happened several times, and it is very disconcerting for the speaker if anybody is standing up and talking while the member is on his or her feet. I ask members to keep their conversations quiet and that they not stand up. I am sorry to have interrupted the member on his feet.

Thank you, Madam Deputy Speaker. Winning over patrons around the world and bringing home more than its fair share of awards and citations means that New Zealand wine is a symbol of excellence. From its very beginnings, this country’s wine industry has grown very swiftly to become a world-class export sector that we can all be very proud of. Yet we must be mindful that a rolling stone gathers no moss. In order to remain robust, to remain very competitive, to continue to preserve its good name internationally, and to grow further, the wine industry must evolve. It must move forward to meet the ongoing requirements of its export markets. This wine bill, with its new enabling legislative framework, will allow export winemakers to better adapt to changing export conditions and safeguard the very good reputation that our wine commands both here and overseas.

Allow me to reiterate the point that this legislation is enabling legislation. It should not be considered prescriptive or, indeed, repressive. It enables any change of compliance in export markets to be met and dealt with by regulatory mechanisms that can be tailored to particular situations. It provides an efficient and flexible process by which winemakers can adjust to regulatory changes within their respective export markets. Rather than having to return to this House every time the regulatory regime changes, this country’s wine export community now has a process in place to meet those challenges, bypassing the potentially drawn-out legislative process it had to go through up until this point. The flexibility of this approach ensures that the new wine legislation will endure in the commercial environment in which the industry continues to operate. Current legislation is not designed to cope with the new situation in the wine industry—in particular, the need to pass special legislation to meet new Eurozone labelling requirements, which other people have spoken on.

Whether or not a minority in the industry disputes the need for the scope of this bill, or even the bill itself, the industry needs a new legislative environment. As production continues to surge and the international environment becomes ever more competitive, the existing regulatory regime for grape wine is becoming increasingly outdated. For other types of wines, as well, changes in the operating commercial environment make such an updated regulatory approach highly desirable. I note that the flexibility of the management plan is illustrated by its ability to be developed on a template basis—as other speakers have mentioned—across a particular wine industry, incorporating existing systems and codes of practice with that industry. An improved system of wine export controls is provided for in this bill, together with an improved mechanism for funding industry or industry-good activities. The bill also introduces important cost recovery for services provided to industry by the Government.

The protection of the wine industry’s good name in export markets should be of paramount interest to us as legislators. One means of harming the industry’s reputation is the falsification of export documents, as is alleged to have occurred in Hawke’s Bay recently. This legislation will go a long way to regulate against such an embarrassing and commercially damaging injury to a vital export sector. We simply must act to protect the industry.

After soliciting the views of the wine industry, I am satisfied that this bill provides the right disciplines for that industry. I accept that some winemakers are wary of increased compliance costs. United Future often advocates stemming the tide of regulatory creep and compliance burdens, but with regard to this bill, those costs are absolutely necessary. It should be noted that they do not blanket the entire industry, but apply only to winemakers who export their products. As I understand it, the key concerns of the industry have been met by the amendments proposed in the select committee, and the regulatory framework laid out in the bill has almost unanimous buy-in from winemaking practitioners.

Let me sum up by asserting that the Wine Bill is not strangulation legislation, as some have indicated. Rather, it will bring life to the export wine industry by equipping it with the capability to better adapt to change by protecting its good name, and it will help ensure that the wine industry remains an icon of this country’s commercial success. United Future supports the Wine Bill, and hopes that it will proceed expeditiously through the House.

I was intrigued by the last speaker, who indicated that this bill does not have high compliance costs. It was never intended that it should have high compliance costs, but I need to remind the Chair that, as previous speakers have indicated, when this bill first hit our desks in October last year, it had a high degree of compliance costs. The member whose eye was the keenest in identifying those costs was David Carter, but we were quick to follow, because we did not see the necessity to load more and more compliance costs on the wine industry—a successful New Zealand business.

Although David Carter’s eye was keener than most, we still found it necessary to equip ourselves with advice. That is where I, too, would like to acknowledge Phil Gregan, and if he were here tonight, I am sure he would appreciate my saying that. I am sure I would win his vote if he lived in Whangarei, and I acknowledge him for the time and effort he put in. I enjoyed his input—he was very succinct and clear. His “yes” meant yes, and his “no” meant no. He was a very patient adviser and a very patient advocate for the wine industry, and I am letting that be known.

It is interesting to note that when we worked through this bill clause by clause, word by word, with our knives out carving out the bureaucracy and compliance costs, Phil Gregan—

💬 Hon David Carter: The “Paper Reduction Bill”.

It was. When we come to the debate on the title in the Committee stage, we will be considering calling this bill—and Rodney Hide will be interested in this—the “Paper Reduction Bill”, because we carved so much crap and compliance costs out of it.

Phil Gregan was interesting. For instance, we would say to him: “This is what this clause deals with, in our view. Can you give us a brief precis on that?”. He did. We would say: “Is this acceptable or unacceptable?”. He would tell us, and we would move on. We would say: “Is this negotiable?”, and he would indicate whether it was negotiable. If it was negotiable, we would negotiate and move on. We would say: “Is this non-negotiable?”, and on behalf of the wine industry, he would say: “This is non-negotiable.”, and it was. We made changes, and I am proud of that. That is the end of my acknowledgment of Phil Gregan. If he were here tonight, he would appreciate that; and if he has any family living in the Whangarei electorate, I am sure they will indicate their thanks in 2005. I acknowledge David Carter and all my colleagues on the Primary Production Committee, who worked well together on that committee.

Trade issues came up a fair bit. Madam Speaker, you will recall—because you have been taking an intense interest in this bill over the last 18 months—that Part 5 of the original bill was separated out and passed earlier this year as the Wine Makers Amendment Act. That legislation governed the labelling of wine to ensure its access to export markets—particularly, if I recall, to the European Union. The bill originally dealt with trade issues. We carved off Part 5, but the bill continues, and the guts of it still continues to deal with trade issues.

We do have a successful wine industry, and I have to confess that my family, as consumers, contributes to that industry in one way or another. At the heart of the Wine Bill is the concept of wine standards management plans.

💬 Gerry Brownlee: “WSMPS”.

That is what we ended up calling them, and it was all to do with trade and standards. Those plans provide a single comprehensive and verifiable regime for food safety compliance, and we know how important that is when it comes to trade, wine composition, labelling, and overseas market access requirements. Those are the four legs of the table. They are the issues that provide stability for this industry when exporting overseas: food safety, wine composition, labelling, and overseas market access requirements. All are important.

💬 Gerry Brownlee: What if the table doesn’t have four legs?

It is quite true that three-legged tables do not have four legs, but I am talking about the success of this industry being underpinned by those four concepts: food safety, wine composition, labelling, and overseas market access requirements.

Wine standards management plans, which are at the heart of the bill, are developed by the industry and approved by another body. It is envisaged that they might be developed on a type of template basis across a particular wine industry, incorporating what exists, because a fair bit does exist. Most manufacturers understand the importance of labelling and of winning and maintaining market access. They understand the issues to do with food safety, so a lot of those things are already in place. However, the wine standards management plans will make sure that, on a template basis, or on a more specific basis, they can incorporate the codes of practice within the industry. That is very important for export markets.

Much was made of the Coopers Creek fiasco some time ago, and members have addressed that. I know that David Carter knows a fair bit about it, and the member of Parliament who spoke on behalf of United Future also mentioned it. The Coopers Creek incident caused a lot of trouble for the wine industry overseas, and we do not want to see that happen again. We hope that such incidents have been curtailed, firstly, by Part 5 of the original bill, which was separated out and made into an amendment to the Wine Makers Act, and, secondly, by the wine standards management plans. The bill also requires that all winemakers must operate under a registered wine standards management plan specific to them. There is a degree of flexibility there, and we have been quite concerned to make sure that growers do not face too many hurdles in obtaining them—particularly those who have standards in place, which, of course, involves most growers these days.

The bill contains strong powers of suspension in respect of the Director-General of Agriculture, who has the powers to act against registered plans that no longer meet the requirements of this legislation. If winegrowers do not comply as of the date the bill is passed and those particular clauses come into effect, the Director-General of Agriculture can use his or her powers of suspension. That is addressed in clause 17, which is a clause I would like to speak about in more detail during the Committee stage, because such powers should not be used loosely. We talked for some time with submitters about that, but we also understood that those in the industry who do not comply and bring the whole industry into disrepute—particularly in our overseas markets—need to be punished. The Director-General of Agriculture clearly has powers to address that problem under clause 17, which I will speak about later.

The need to pass this legislation is vital to the future of the rapidly growing wine industry. The setting, the monitoring, the compliance, and the enforcing of agreed wine quality standards, plus a more flexible system to ensure continued market access and a revised system for setting levies, are seen by the industry as being the main benefits. The downside of the legislation, which I will address, is seen by the industry as being the cost of compliance, and I will be talking about that. That matter has to do with clauses 85 to 97, and I can assure members that they will hear about it later.

The development of the wine industry in New Zealand, particularly post-1990, has been quite extraordinary. In debating this bill, it is worth paying tribute to those who pioneered the industry many, many years ago. We should think of some of the difficulties they faced in their time. I understand that, for a time, it was not legal for a winery to sell anything less than 6 gallons of its product in any one sale. We have progressed to a point today where, I understand, New Zealand has in excess of 1,600 wineries, producing some of the best wines in the world. It is appropriate that this bill is passed to give the sorts of protections that the industry requires.

My support for this bill is based on my belief that the industry is quite comfortable with the provisions in it. Earlier in the year I was approached by Brent Rawstron and the Giesen Brothers from Canterbury—an area that is starting to flourish as a wine-producing area. They raised a number of concerns, which I believe are mitigated by the bill reported back to the House.

New Zealand produces unique wines. I have a somewhat uneducated palate when it comes to wines. Montana Wines was entering an agreement with the then Seagram’s company in the United States a couple of years ago, and Montana facilitated an opportunity for me to travel to the Napa Valley in the US as part of the friendship programme that New Zealand operates with the US. However, under our current Government I understand that that programme is almost curtailed, because friendship with the US is off the agenda. We do not talk about it; we simply subject ourselves to a humiliating 12-minute pull-aside that goes something like: “Hello, George”; “Hello, Helen”; “How’s the family?”; “Not too bad. What other things would you like to talk about?”; “Well, I don’t know.”; “Hang on, I’ve got to answer my cellphone, but nice of you to come, Helen. Goodbye.” Then the Government puts out a press release saying what a great relationship we have with that country.

I turn back to the bill. I was able to travel up to the Napa Valley and to a winery owned by Seagram’s, which at that stage was marketing—

💬 Jill Pettis: Tell the truth.

Good God, Madam Chair! You must do something. That member is yelling out. They call her the paint-stripper. Just look at the varnish on the walls of the Chamber—it is starting to bubble. It will cost the taxpayer a fortune to fix, if that woman is not made to shut up.

I went to the large winery that Seagram’s had at the top of the valley, and the people there decided to have a tasting between two locally produced wines and two wines imported under the Brancott Estate label. They defied me to pick the difference. Even with my very uneducated palate, there was no question which of those two wines came from New Zealand. They were unique in their taste, they were quite fulsome, and I could understand why they were selling at such a premium in the US. It is an industry that is growing considerably, and needs encouragement.

I recall also attending a luncheon at the Windows on the World restaurant at the top of the World Trade Center—the building that was the victim of a terrorist attack just a wee while ago. I was there with the Hon Phil Goff; a well-known traveller and a gentleman well known for frequenting the best and most expensive restaurants all over the world and around the country. He is our Minister of Foreign Affairs and Trade, and I believe he is able to visit extremely good restaurants in that capacity. He has a quite considerable chequebook made available to him by the taxpayer. We were both guests that day of a well-known company that has connections in New Zealand, and those people were able to show us that some New Zealand wines on that wine list were selling at a price in excess of US$30. That is NZ$60 or NZ$70. The mark-up potential for the retailer in the US is very big, and it is only to be hoped that that price is reflected in the price to the grower as our wines embrace a standard that allows more of them to be marketed in such a strong way.

The other reason why we are pleased to support this bill is that although we are not particularly in favour of excessive regulation, we do notice the significant acreage of vineyard going in around the country. The other Sunday I drove up to a small mountain village called Hanmer. I noticed on the way, at Waipara, that hundreds of acres are being planted in grapes. I have noticed also in the Marlborough area the progress of the grape across the Wairau Plains. Those vineyards are going to provide significant employment opportunities for New Zealanders.

They also challenge the current Government to do something about the appallingly low incomes of New Zealanders these days. The Government is saying that New Zealand is now a $17-an-hour economy. Well, I doubt that anybody—with all due respect to winegrowers—working in a vineyard pruning, for example, is earning $17 an hour. In that regard there is a duty on the Government to ensure that regulation like this does not become too big an impost on that winegrower.

We also notice that a significant number of New Zealanders have their superannuation funds tied up in these vineyards that are appearing around the countryside. It is also in the interests of those people that we have an industry that is able to flourish and grow, and that can be easily recognised by the international community for its excellence.

Although the National Party initially greeted this bill with some degree of scepticism, we were very pleased with the response we got when we approached perhaps the greatest connoisseur of wines in this House, Mr Speaker himself, who was instrumental in ensuring that the select committee dealt with the concerns that the industry had.

Can I further say that the issue of the lack of trust in the Government is something we will keep a strong eye on. We were surprised that it decided to put on the sherry tax a few years ago. That was supposedly because it did not want 15-year-olds drinking sherry. I have to say I have not noticed hordes of 15-year-olds racing out to the sherry shop since the Government put the price up. Frankly, they were not racing there before. We are worried that the Government may see this growing industry as a significant revenue source—that is, a source of revenue over and above its natural growth. We most certainly would not want that. I can say that although the contentious issue of excise always is one on which the industry represents itself very well—

R Doug Woolerton: My God, this is hard work!

I say to Mr Woolerton that it was not me who called for urgency on this bill. It was not me who said that we have to plunge Parliament into urgency to pass this boring legislation; that we have to require the whole of Parliament to be here until midnight for the next 4 nights to pass this legislation. It was not me; it was that genius Dr Michael Cullen, that extraordinary manager of the Order Paper of the House. Michael Cullen would not have a clue. So here we are in the dark of night, heading towards the wee hours—no, it is only half past 8. I am even bored with my own speech, having recognised the time!

I will conclude simply by saying that the National Party supports this legislation in the full belief that it has support from the industry, and with the watching brief that we do not want this sneaky, “lefty” Government applying additional costs to those people in the country who have invested in this very, very productive sector.

Bill read a second time.

Procedure