Geographical Indications (Wine and Spirits) Registration Amendment Bill

I move, That the Geographical Indications (Wine and Spirits) Registration Amendment Bill be now read a second time. This bill amends the Geographical Indications (Wine and Spirits) Registration Act 2006, which provides for a registration system for geographical indicators, but the Act is not yet in force. Before the Act can come into force, some amendments are necessary to clarify some provisions of the Act and to ensure that the registration process runs smoothly and sustainably. This bill achieves that. It is useful because it helps to strengthen and protect the story that lies behind the success of the New Zealand wine industry.

The New Zealand wine industry, as we know and enjoy, commands one of the highest premiums internationally, and that comes back to the story behind it. This industry has achieved phenomenal growth over the last couple of decades. I remember around 1998, I think, when the country achieved about $100 million worth of exports for New Zealand wines. This year it is about $1.6 billion worth of exports. So the wine industry has been very successful in contributing to export growth for the New Zealand economy and in providing many jobs and many livelihoods, as well as great enjoyment and pleasure for the customers.

I would like to thank the Primary Production Committee for its consideration of the bill. I want to note, particularly, the work of its chair, Ian McKelvie, and the many members of our committee who have a keen interest in wine. I am looking forward immensely to the speech by my colleague Stuart Smith, that leader in the wine industry, who will be talking later. The committee’s report did contain a number of sensible recommendations for the amendment of the bill. I want to acknowledge the submissions from the public and, in particular, from the New Zealand wine industry.

Most of the amendments recommended by the committee were of a relatively minor nature, but two significant amendments recommended by the committee involved procedures for opposing registration and for the renewal periods for registered geographical indications. The Geographical Indications (Wine and Spirits) Registration Act 2006 leaves opposition procedures almost entirely to regulations. Other similar legislation relating to registered intellectual property rights, such as the Patents Act 2013 and the Trade Marks Amendment Act 2012, makes explicit provision for opposition procedures. The amendment recommended by the committee inserts a new clause 21A into the bill, which inserts new provisions into the principal Act to require the registrar of geographical indications to advertise the intention to accept an application to register a geographical indication. This allows interested persons to oppose registration if they considered that the indication should not be registered.

The other significant amendment relates to the renewable period provisions in the bill. The bill as introduced provided that geographical indications must be renewed by paying a renewal fee every 10 years. The renewal fees will contribute to the ongoing maintenance of the register of geographical indications and help keep the initial application fees down. However, as most of the applications to register geographical indications will be made in the first few years after the principal Act enters into force, there is a risk that the revenue raised from application fees could be insufficient to cover the cost of establishing and administering the register of geographical indications. This could be a particular problem if application numbers are lower than estimated. So, in response to this, the committee has recommended that the bill be amended to provide that the first renewal fee is payable 5 years from the date of registration of a geographical indication and at 10-year intervals thereafter. Those recommendations, I think, are sensible. I agree with the select committee’s report, and I commend this bill to the House.

Labour will be supporting this bill as well, and I think pretty much everything that Minister Goldsmith has just spoken on we would very much agree with—wholeheartedly, in fact. We are about to commence more formal discussions with the EU about a free-trade agreement. It has been, obviously, complicated by Britain exiting from the EU. Britain has been, traditionally, one of the main ways in which we have entered the EU and now it is, as we all know, going by itself, so we have got to work out new ways of being able to get those talks off the ground again and get them moving.

As the Minister said, legislation has been sitting there since 2006, but we never actually pushed start to get it under way, because talks with the EU had stalled. One of the driving forces behind getting this bill into force is the fact that we are now in a different situation, and the Government felt it necessary to push this bill along, get it through the House, and get it enacted to ensure that we get the protections and privileges and ability to get that trade deal, ultimately, across the line. The EU, by the way—just to give the dimensions—is the largest trading bloc in the world, and the biggest market in the world with more than 500 million affluent consumers. Currently it is our third-largest market. It is about $19 billion in two-way trade. About $9 billion of that is exports and about $11 billion is imports, so it is a significant and important partner with us, and it is a partner with which we do not have, at the moment, a trade agreement.

One of the issues of this bill is, essentially, to designate areas of New Zealand with regard to wine and define them as areas that cannot be replicated in other places. Obviously, we have the example of Champagne in France—that is the only place that can produce champagne. Outside of Champagne, you produce sparkling wine. Scotch whisky is another example. Just recently, the Greek Government won a case that only Greece can make feta cheese; everybody else has to make white cheese. So if you are buying feta cheese, you are getting it from Greece. If you are buying white cheese, it is from somewhere else, unless somebody is claiming falsely that it is feta cheese.

What it means for us is that Marlborough sauvignon blanc can be produced only in New Zealand and labelled Marlborough sauvignon blanc, and nobody else can do that. Likewise with Otago pinot noir—it can be done only in New Zealand. That has considerable benefits for New Zealand because, as the Minister said, our wine attracts a very high premium. In fact, the premium that it attracts is higher, pretty much, than any other wine anywhere in the world. In fact, when they looked at this at the end of 2014, the New Zealand bottled grape wine was the highest of any import in the United Kingdom. New Zealand wine was about $9.15 a litre, and that compared with second-placed France at $7.36, and the Australian wine was a miserable $5.28. We are getting very good prices for our wines, so it is very important as well that we are able to protect the value of those by ensuring that nobody else can use the same descriptions that we use. Likewise, we are obligated to make sure that 85 percent of the content of that wine will be wine that was produced in those particular places, and only 15 percent is allowed to be blended. That also safeguards our product and makes sure that our product is a good one.

The Minister mentioned the wine industry. It is now worth $1.6 billion. It has grown 110 percent since 2008. This is an extraordinary success story for New Zealand. It is now, I think, the sixth-largest export that we have. It is on the way up, and by 2020 it is estimated that it will be worth $2 billion to the New Zealand economy. So the sorts of protections that are here are well worth getting into force soon so that no other producer can come in before us and start claiming that their sauvignon blanc is Marlborough sauvignon blanc when, in fact, the only place that that can be grown and produced is New Zealand.

As the Minister also mentioned, there was a lot of support for the bill. There were 133 different submissions. There were 130 of them in support from winemakers and people in the wine industry, in particular. The three dissenting, if you like, voices in that 133 actually wanted to go further and make sure that 100 percent of the wine that was produced in that area was from that area and not blended by 15 percent. So there was unanimous support for getting this bill into operation and, as the Minister said, it is relatively straightforward.

The Primary Production Committee did a good job in making a few minor alterations in order that, effectively, the list or the inventory of the wines that are going to be listed down is slightly easier to comprehend, understand, and use. Other than that, it pretty much, with those minor amendments on the 2006 bill, effectively puts the 2006 bill into operation and, as a result, as I say, it is a bit of a no-brainer. This is a good piece of legislation that will protect our industry. It will enable us to get into Europe, sell our wines in Europe at a high premium, and continue to protect our wine industry going into the future. The Labour Party members, for those reasons, support it wholeheartedly.

The Geographical Indications (Wine and Spirits) Registration Amendment Bill is a really important bill and takes a great step forward for the wine industry, and I welcome it into the second reading. I would like to start by acknowledging the Primary Production Committee chair, Ian McKelvie, who has graciously allowed me to bat a little bit further up the order—so I thank him very much for that.

I would like to set the scene a little because the wine industry has really blossomed in New Zealand, as the Minister and the previous speaker pointed out, with sales growing to $1.6 billion. It started at a very low level, and I think the real step forward for the wine industry was when Ernie Hunter entered his sauvignon blanc in the Sunday Times wine show in London, which had two sections: one that was judged by professional judges and one that was judged by popular choice. Ernie was never backward at coming forward when it came to marketing, so he organised it so that when the public were going through the wine show they could taste his wine and taste Bluff oysters that had been flown especially to London on the Concorde. Those people who paid a bit of attention will know that the Concorde has never been to New Zealand and the oysters were not Bluff oysters, in fact. But it did not matter. Not only did he win the popular vote but he also won the actual professional judges’ vote—and that is really what launched Marlborough sauvignon blanc on the world stage.

Its unique flavours really speak to the terroir, which is what was mentioned by the previous speaker, and that is what people are really looking for when they go along the shelf in their supermarket or in their wine store looking for a wine. They are looking for an assurance of a taste and a quality that they like and identify with, and that really comes down to the geographical indicator. We know that wine and the flavours that wine produces are closely related to where they are grown. I am not exactly sure what that is about. Is it the soil? Is the climate? It is probably an amalgam of all of those things, as well as the people who are involved with it, and that is actually what the literal translation of “terroir” is.

It is a really important part for the wine industry to step forward. The industry is really anticipating this and has already put a lot of work into where the boundaries of those geographical indicators are. In New Zealand that is pretty easy in a lot of cases because they are bound by geography. In the case of Marlborough, it is bound by the sea, by hills on either side, and by frost if you go far enough inland. So it is quite a confined area, really, for that geographical indicator. The wine style is absolutely consigned to that, and I think the select committee really enjoyed seeing all of those people come before it to speak and give their evidence. You are going to stop me now.

I apologise for interrupting the member.

Debate interrupted.

The House adjourned at 10 p.m.