Geographical Indications (Wine and Spirits) Registration Amendment Bill

I want to begin, obviously, by expressing the Labour Party’s view that it will be supporting this bill, the Geographical Indications (Wine and Spirits) Registration Amendment Bill. It was a somewhat curious birth of this bill, because this legislation was actually passed in 2006 but it has never been put into operation or passed through since that time. It needed some amendments, and we are finally getting to the point where those amendments are in front of us now, with this amendment bill. The 2006 legislation will be amended and finally put through this Parliament.

The reason for the activity around this bill now is that we are in the process of negotiating a free-trade agreement with the EU, possibly over the next few months or perhaps as close as a year away from today. This bill is important for those negotiations, because what this bill does is it ensures that New Zealand wines can be attributed to their geographic area. Much like champagne is attributed to Champagne—it can be called champagne only if it is grown in the Champagne area—so too Otago pinot noir can be grown only in Otago, and Marlborough sauvignon blanc can be grown only in Marlborough. Therefore, the legislation protects those areas and that brand, and it ensures that the quality of our wines coming from those areas is also protected.

It is important when we look at the wine industry, which is growing at an extraordinary rate—$1.6 billion today; by 2020 it could be worth $2 billion in terms of exports. That is an extraordinary growth and success story. I was lucky enough to be at the Air New Zealand Wine Awards on the weekend, where I was able to see just how vibrant and passionate people within New Zealand are about their wine and how important it is to us in New Zealand in terms of our exports. It is also worth noting, in terms of its importance, that New Zealand wine per litre that we sell overseas sells for about $9 a litre. Australia sells at about $7 a litre and France sells at only $5 a litre, so we are getting premium value for our wine. It is along protecting that, which this bill seeks to achieve—to maintain that quality.

The bill, as I said, was first brought in a number of years ago. One of the parts of the Act, section 21—again, to guarantee the quality—provides that “A person may use a New Zealand registered geographical indication”—which is the area—“or indications in trade in New Zealand in relation to a wine only if—(a) at least 85% of the wine is obtained from grapes harvested in the geographical origin …” to which that geographical indicator has been registered. The second thing is the amendment to section 21 in the bill provides that the remainder of the wine, if there is any—and usually in New Zealand there is not; it is normally 100 percent—must be obtained from grapes harvested in New Zealand. We cannot simply import some of that cheap French stuff and mix it in with our own. So that is section 21.

What that means in terms of this bill in front of us is that we also have a number of clarifying propositions in the bill that will smooth the running of the bill, and a Supplementary Order Paper (SOP) 244 that was hastily put together by Paul Goldsmith, the Minister in the chair at the moment, because it was left out—another sloppy bit of work by the Government. But, nevertheless, the SOP we will support as well because otherwise we will have a half-baked, half-finished bill. And we do support it, because we support New Zealand’s wine industry and we believe it is important. These clauses make a lot of sense, and the Labour Party has great pleasure in supporting the Government’s bill.

New Zealand First has supported this bill through its stages so far, and during the second reading I gave notice that that continuing support might be dependent on the presence or removal, as it were, of one particular clause—

💬 Todd Barclay: Come on, Prosser.

—yes, Mr Barclay, I will get to that—with which we had particular issue, and for good reasons.

As Mr Shearer touched on, it is pertinent that we are examining this bill at this time, because it is important not only for the industry here in New Zealand, and for our relationships with trading partners for our imports and exports of wine, that geographical indicators be recognised in overseas jurisdictions, that we have protection for those, but also so that our trade partners have the assurance of knowing that their registered geographical indicators will be recognised here. So it is all part of that same framework. In that light, looking at Supplementary Order Paper 244 from the Minister of Commerce and Consumer Affairs, as he says in his explanatory note, it corrects an oversight. It is technical in nature and it brings the bill back to what it was originally intended to be, and we do not have an issue with that. Neither do we have an issue with the bill itself apart from, as I say, the particular clause, which is new section 39A in clause 21B. We really have hit a brick wall with this, unless, of course, the Government can see fit to removing it from the bill or altering it dramatically so that it does not cause the issues for us that we have identified.

In the commentary on the bill from the Primary Production Committee—of which I am a member, I am very happy to say—the committee said: “The bill, as introduced, provides that the Registrar must not register a geographical indication if its use or registration is deemed offensive to a significant section of the community, including Māori.”, and, really that should be as far as it needs to go. In some ways it could be argued that it is further than it needs to go, but it singles out Māori once again. It does not single out any other ethnic group. It does not single out any other people or division of society for any reason or in any way, shape, or form, but that seems to be the politically correct way that National is evolving, and that is the clause with which we have a problem.

I have put forward two Supplementary Order Papers to overcome this impasse. The first is No. 246, and it is quite simple. It simply calls for the deletion of clause 21B altogether, and that would do away with that problem because the further reference then to the function of the Māori advisory committee established under the Trade Marks Act 2002 to advise the registrar whether the proposed use or registration of a geographical indication is likely to be offensive to Māori simply goes away.

I am guessing that the Government has probably done some sort of a deal with the Māori Party and that its continued support for other legislation is dependent on having this continued divisive, separatist clause included in the bill, but if the Government must insist on having that, then we have suggested a compromise. It is on Supplementary Order Paper 245, again in my name, which suggests replacing the Māori advisory committee established under the Trade Marks Act with the Geographic Board, because, as I made mention in the second reading, these are geographical indications that we are talking about. They are place names, they are names of features, and they are names that are currently in use, and if it must be presumed that the name of a place or a feature is acceptable for general use, then it must, by definition, be acceptable for use in association with a wine or a spirit that is produced in that region, or has a close association with it. If there is going to be some sort of a deviation from that, then the Geographic Board, we feel, is the correct body to examine it.

As we have seen with some of its recent press statements, the Geographic Board is currently examining a number of place names that, although they have history in New Zealand, are no longer acceptable in current usage. I refer to a hill in North Canterbury, and the official name for it is Nigger Hill. That is, obviously, plainly unacceptable nowadays and the Geographic Board is removing it, and it would be a logical continuation that if somebody attempted to register a wine or a spirit with that name, it would be offensive to a great many people, and not simply Māori. The Geographic Board could use that as an opportunity to remove that name from the Gazette, as well as to deny its use on a wine label.

So I certainly hope that the Government will look seriously at at least the second of these two Supplementary Order Papers. If it does, then obviously our support for the bill will continue. If not, it probably will not. Thank you.

As my colleague David Shearer said, Labour will be supporting this piece of legislation. It is somewhat ad hoc, I have to say. The original Act was actually passed in 2006 but was not able to be put into place, and so what we are doing now is making amendments to that piece of legislation in an ad hoc way that deals with the particular issues—and that is progress, I guess. But, as we have seen in the House today, we have another Supplementary Order Paper (SOP) from the Minister of Commerce and Consumer Affairs to tidy up a few things. So we hope that there have not been too many omissions.

The Primary Production Committee did do its very best to cover all these things and to make sure that the intent of the original 2006 Act is being carried through, in a somewhat more modern environment and one in which we have seen the rapid growth and progress of the wine industry. So we endorse the implementation of the original Act and intention, but I raised at the select committee on a number of occasions the issue of missed opportunity. We are seeing, actually, with honey at the moment—mānuka honey, which is something that I guess we have considered unique to New Zealand and something incredibly valuable and growing both in terms of its total export value and, actually, in the properties that are available across the whole health and medical area. So we should have had some reference to protect that very, very valuable product. It is being developed in New Zealand and sold offshore without any protection at the moment, and it is the same thing with much of the food that we are producing in this country at the moment.

So the geographical indicators proposition and legislation, as we will pass it through, identifies the areas from which food and beverages are produced—no, it does not. It actually just deals with wine, but why not food? I asked that question until most of my colleagues in the select committee got tired of me asking it—you know, why we should not. And it was because, quite frankly, we have got a Government that has sat on its hands over this, will sit on its hands over mānuka honey, and will sit on its hands over food production, so that we will miss opportunity. The only reason, as my colleague said, that the Government has actually moved on this is that there is an EU trade deal. But we will not have an EU trade deal until we have addressed the issue of food geographical indicators and we respect their geographical indicators, and we should have in place those of our own. So this bill is a missed opportunity for New Zealand, once again, by a Government that lacks the vision to see where we will be going as an export nation in the primary sector into the future 20, 30, 50 years out. We will be back in this House, particularly if there is a Labour Government, addressing these issues in food and in mānuka honey and in all of those other areas where we need protection for our producers and exporters, but this Government refuses to step in.

The bill, as I say, makes amendments around registration times—around protection of those. We have always assumed that Marlborough sauvignon blanc is something that we are proud of and that we have developed. But, actually, without this legislation it has no security in the international market place and indeed people are already asking questions because of the large amount of bulk wine supplied offshore, which is bottled offshore with a Marlborough sauvignon blanc label on it, but actually without the protections that I think we need to uphold that brand. Although this piece of legislation will not guarantee protection for the wine industry, it is certainly moving ahead in terms of the production of the wine from an area and ensuring that we can put the label on it with some truth and with some integrity.

As I say, we will support the Minister’s SOP. We cannot support the ones by New Zealand First, as much as we like to work with them on many issues and share their criticism of the Government on most issues. On this particular one, I think the select committee has worked through it. It is a tricky area using Māori terms, and we believe that it should not just be the Geographic Board. I think these will be more important issues as we move forward, as I say, into the area of food—mānuka honey and others, as we move forward. I think it is fair enough for us to establish, I guess, the precedent of having an advisory board where I think Māori terms will be a bigger part of our overseas exports. It is something that is truly unique to New Zealand. I think we are starting to appreciate that—Māori culture and all the history and the stories and, in fact, the wisdom that we are just starting to learn about. As we move forward we have got to ensure that we do not abuse or overuse it and that we have appropriate use of Māori terms, geographical places, or whatever.

So I think that we are making good progress. We do not want to delay the passage of this bill. I think the select committee has done a good job. I would like to acknowledge the members of Government on that committee. They are, as always, under riding instructions from the Minister, so they are a little bit restrained, I have to say, and it would probably be a smarter committee if they were allowed to do a bit more and work with the Opposition. But this is a good piece of legislation. I acknowledge that the Minister has finally got around to doing something. It has been sitting around since 2006. Labour welcomes the passage of this bill to protect the wine industry and all the amazing development that we have had there. But what the Government has missed is an opportunity to protect the food that we produce and things like mānuka honey, which are at risk from people putting in place, selling, and exporting things around the world with a New Zealand label on them, but they are of course not true to brand and they risk undermining our reputation. Some progress—but a missed opportunity.

It is a real pleasure for me to be able to stand in this Committee stage and acknowledge the support across the Chamber for this legislation. I am very sad to hear that New Zealand First is having trouble with this bill, and, sadly, we are not able to support its Supplementary Order Papers (SOPs). It is not really appropriate for the Geographic Board to be making recommendations. The trademarks advisory board has the equivalent expertise, it is in place under the trademark legislation, and there has not been a great deal of difficulty or complication involving it, so it makes sense to use it in relation to this legislation. So we will not be supporting New Zealand First’s SOPs, but it is great to have the support of the Labour Party and others, I hope, for this bill.

Ultimately, this is a piece of legislation that is designed to help what is one of the most innovative and successful industries we have in this country—the wine industry. It was only in the late 1990s when the country broke the $100 million mark for exports for the wine industry. We are now, this year, at $1.6 billion and on track to increase that further to $2 billion and more over the next few years, so it is a phenomenally successful industry. It is one in which the New Zealand winegrowers are able to command one of the highest—if not the highest—premiums on wine in the world, and that all comes back to, essentially, the story. Well, that is not entirely true—it comes back to the quality of the wine, obviously, which is a very important part of the process, but it is reinforced by the story and the branding that is developed, based on quality but also on the terroir, the landscape in which the wine is produced. So the ability to protect the intellectual property and the integrity of the wine that is developed in specific regions in New Zealand is an important part of securing that value proposition for New Zealand longer term. That is why this legislation is important. It has had a long gestation, and I am very pleased to be part of a Government that is actually getting on with it and getting it in place so that we can carry on.

I do want to acknowledge the hard work of the Primary Production Committee members and note their recommendations to change clause 9 of the bill, particularly the payment of renewal fees so that the sustainability of the funding is better. They were suggesting having the first renewal after 5 years; that all makes sense. My SOP 244 is there to fix up a little problem in that we wanted to have only interested persons able to oppose the registration of a geographical indication and/or its removal or alteration. Removal and alteration have been left off, so that SOP deals with that.

I do also want to pay tribute to the work across the House in terms of putting this legislation together. My hope is that this will be an industry that continues to thrive and grow and expand over the years to come. This legislation is only a small thing, but a small but important thing so that the industry can have confidence in the integrity of the branding that has been developed and can go with confidence into markets over the next little while. So thank you very much, and I look forward to hearing some of the other comments made by other members. Thank you.

Tēnā koe, Mr Chair. The Green Party supports this bill, the Geographical Indications (Wine and Spirits) Registration Amendment Bill. We think that this issue is vital for New Zealand’s wine industry. The wine industry is a great example of an industry that has not only benefited from savvy marketing—so to speak; excuse the term—

💬 Richard Prosser: Ha, ha! Very good.

Good, thank you—but also from a drive for sustainability, which we regard as leading practice amongst agricultural sectors.

We share a concern that this bill is coming late to the House and that the Government did not act on this earlier. We think that this has exposed New Zealand wine producers to the potential for knock-off New Zealand wines from other parts of the world and we are very pleased that, belatedly, this bill has come to the House. We note it is also an implementation of article 23 of the Doha declaration, so it has been the subject of multilateral trade negotiations, and we think that the protection of wonderful place names for New Zealand wines, such as Marlborough, Central Otago, Wairarapa, Kūmeu, Te Kauwhata, is going to be enormously important for the New Zealand wine industry in the future.

We recognise that the issues of geographical indicators are strongly associated with international trade agreements. The United States system tends to favour trademarks rather than geographical indicators, and perhaps this bill is timely, with the recent demise of the Trans-Pacific Partnership agreement and the forthcoming proposed rise of a New Zealand - European Union free-trade agreement. But I share my colleagues’ concern that we have not moved faster in order to have a more articulated and broader coverage of indicators. For example, the European system has a Protected Designation of Origin that deals with the know-how of production, as well as the Protected Geographical Indication, and a third category called Traditional Specialities Guaranteed that relates to traditional knowledge and character and production. So, in that way, we might have stronger protection for the value added from our primary production sector, and encourage specialisation in our production that will then command higher prices and defensible prices internationally.

We think that geographical indicators should be extended to food products such as Bluff oysters, Morrinsville cheese, Pukekohe potatoes, Ōhākune carrots, Waiheke olives—there are many such food products that could benefit from geographical indicators. We are disappointed that the Government has been moving so slowly in order to extend geographical indicators beyond the wine sector, and we are disappointed at the delay that it has taken to cover the wine sector through this legislation. The Green Party supports a broader approach to food labelling, including country-of-origin labelling, and we note that New Zealand has not introduced country-of-origin labelling despite that designation being labelled in Australia and being the only area where we have not got joint rules with Australia on labelling.

On the bill itself, as I said, the Green Party supports this bill, we support the Supplementary Order Paper (SOP) 244 put up by the Minister of Commerce and Consumer Affairs, and we support the recommendation from the Primary Production Committee for the establishment of a Māori advisory committee under new section 39A, inserted by clause 21B. Therefore, I am afraid, we cannot support the two SOPs, 245 and 246, suggested by New Zealand First. We do strongly support many of its recommendations, but not in this case. So, with that, I commend support of this bill.

Before I begin, because we all know how important our wine industry is here in New Zealand, I would just like to send my sympathies out to those within that industry who have been affected by the earthquakes over the last 36 hours. I am hearing on the radio that there have been some winemakers whose production has been affected by the earthquakes, and, I think—along with all people who have been affected—our sympathies go out to them. We hope that they can return to production as soon as possible, especially around the Marlborough area, which I understand has been affected quite a lot. I think that would go for the whole Committee.

I do want to take a short call to praise some of the work done by the Primary Production Committee around the issue of having a new section put into this piece of legislation around the appointment of an advisory committee. It is very similar to what is in the Trade Marks Act, and that is to set up an advisory committee for when there is some dispute or some offence caused to someone when an application is made for a wine or a spirit and it is likely to be offensive to Māori. I do understand that New Zealand First has two Supplementary Order Papers (SOPs), 245 and 246, opposing this move. I would just like to think that this Parliament and this country has come a long way from the point of saying that in this particular instance it is a special case for Māori.

This piece of legislation is all about Brand New Zealand, and one of many unique identifiers that we have for New Zealand is our tangata whenua, our people of Māori origin, and a lot of the place names that go around that may be seen as a unique identifier—a brand—for a particular type of wine. I can foresee some instances where there may be some dispute and offence may be taken, whether a place name has been used inappropriately or whether there is some dispute over a place name, and this has to be looked at.

💬 Richard Prosser: Name a couple.

I am sure there will be; that is why an advisory board has been set up. New Zealand First supported this piece of legislation at its first reading. It then went off to the select committee, and I believe the select committee made a good improvement. It inserted this advisory committee, which is already established under the Trade Marks Act. It is just ensuring that there is a body to make sure that any dispute can be looked at. My issue with this is that if New Zealand First members did not see it as an issue at the first reading, they should not have supported it at the first reading. My understanding is that they did, and I think they saw it late and are now trying to make a point of it. I actually think it is a very good thing to make sure that there is a check within this piece of legislation so that if there is a dispute or opposition to a unique Māori identifier there is a body that can look over that, that can make sure all the relevant issues are looked at.

I think that the SOPs, both 245 and 246, will not get support, and I think that is the right thing to do because I think 245 is what New Zealand First did because it realised that this was in here and wanted to scrap it. Then 246 is trying to put, I think, if I have got my sequencing right—I think I have them around the wrong way. SOP 246 was what New Zealand First wanted to do to scrap the clause altogether, and 245 is: “Oh, hold on, we can’t do this. It’s a bad look because we haven’t done it in the right sequence, so how about the Geographic Board do the work instead?”.

I believe it is a good sign of race relations in this country that we can actually do this, rather than say it is a backwards step. So my message to the Primary Production Committee is: good on you for seeing that there was an issue. It was originally in the legislation but there was not a mechanism to be able to look at and cover these disputes, and now there is. I gather from the debate that has been had at this Committee stage that the SOPs in the name of New Zealand First will not get through, and I for one think that is a good thing.

The question I would like to ask is: how much is a brand worth? In 2005 the then Ministry of Economic Development tried to value Brand New Zealand—you know, the clean, green, “100% Pure New Zealand” brand—and came up with a figure of about $20 billion a year. In 2008 PricewaterhouseCoopers came out with a report that said about 80 percent of New Zealand companies that are exporting leverage off Brand New Zealand. So, clearly, anything to do with Brand New Zealand is worth a lot of money, and it is good to see these protections are going to be in place—there is no doubt about that.

I look at the province where I come from, Hawke’s Bay, which is building an enviable reputation around fine wine and great food. I mean, some would argue—and I doubt any in this Chamber at the moment would doubt it—that, in fact, Hawke’s Bay produces the best wine in the country.

💬 Meka Whaitiri: That’s right.

Yes, thank you very much. And I know that what we do is we target the super-premium end of the market, which is where we should be as a country, and if we are not there as a country then we need to take a good hard look at what we are doing.

There are a couple of questions I have with regard to this bill, and I am unsure whether the Minister in the chair, the Hon Michael Woodhouse, is able to answer those or not, but they are worth bringing up. The first thing is the ability to register a brand is, I think, very important for what a lot of companies in certain regions are trying to do. It is slightly at odds with what Dr Nick Smith is trying to do, though, for example, around GE-free Hawke’s Bay. We want to have this as part of our overall brand offering, and Nick Smith is saying “No, it can’t be done.”, which concerns me. There are also things around fracking. We want to be able to say, as a region, no to fracking because we think it is at odds with the brand that we are trying to create, and yet Nick Smith, again, is saying no, he does not think that this sort of decision should be made at regional level.

First of all, I want to talk about the duration of registration, and I have slight concerns about this. It may be that Mr McKelvie, as chair of the Primary Production Committee, will be able to help me out on this. For some reason, the bill started talking about a period of duration of 10 years, but then they cut it down to 5 years, and I am unsure why. When an organisation, or a group of organisations, or an industry is trying to build a brand, they invest a whole lot of capital in getting that brand to a level where they believe it is actually paying its way. I would argue that 5 years is not long enough, and that you absolutely need at least 10 years. To cut down registration from 10 years to 5 years—I just cannot see the logic in that, unless it is purely financial and they believe that what they are going to do is increase the registration. I hope that that is not the point.

Reducing the time of registration from 10 years to 5 years seems to be at odds with continuous use. When I look at clause 16, which amends section 29, “Continuous use”—I think this is very important, and let me backtrack a second. We have a winery in Hawke’s Bay called the Bridge Pa Vineyard, for example. The Bridge Pa Triangle Wine District is a specific area. I would hate for another winery to be able to come in and say: “Well, we’re located in Bridge Pa; therefore we can use this.”

The bill defines continuous use as 32 years, and then 22 years. I would argue that that is far too long a time to define continuous use. I would argue that even 10 years is a very good pre-emptor of continuous use, because 10 years of a specific brand, certainly in a global market, is enough to create the level of brand attribute that will repay the investment that is put into that brand itself. I do not know why this bill allows only 5 years for registration when it was 10 years, but the continuous use provisions in clause 16 are a lot harder.

The thing I would also like to talk about is “offensive”. I am not too sure where Mr Prosser is coming from, because the way I read this, it says “be likely to offend a significant section of the community, including Māori.”; it is not specific to Māori. The thing that I would like to also know is: what is going to define “offensive”? Is it going to be quite a prescriptive list of what offensive is? If one person is offended, is that enough to say: “No, we’re not going to allow this.”? What actually is the definition of “offensive”? How is this going to be policed in a way that is actually legitimately fair?

The other thing that we must understand, I think—because, you know, the purpose of this bill is actually to protect those who have been using a brand. I believe that those in the wine industry are inherently honest, anyway. If they were not honest, and they were using a brand in a way that was dishonest, what it would, in effect, do is cause harm to that brand anyway. For example, if we in Hawke’s Bay said “This is Marlborough sauvignon blanc.”, then that would be inherently dishonest, and the risk to the brand’s integrity would be significant. The thing I do like about this bill is that what it actually does is it codifies in legislation that which I think the industry does already at this point in time—so that is good to see.

There is just one last point I would like to make, and that is—you know what? I have forgotten what it was. It was incredibly important and it was going to be about Hawke’s Bay. The thing I suppose I would like to say is that it is good to see this, and it is good, I say as a person who comes from Hawke’s Bay, because I think this will only benefit what we do in the bay. Thank you very much.

The question was put that the amendments set out on Supplementary Order Paper 244 in the name of the Hon Paul Goldsmith be agreed to.

Amendments agreed to.

The question was put that the amendment set out on Supplementary Order Paper 245 in the name of Richard Prosser be agreed to.