Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill

I move, That the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill be now read a first time. I nominate the Justice Committee to consider the bill.

It’s always a thrill to have a member’s bill pulled out of the ballot. And tonight it is a special occasion because earlier on this evening we celebrated downstairs the successful nomination of Dr John Barker, who has been appointed Director-General of the International Organisation of Vine and Wine, which is called the OIV but is often referred to as the UN of wine. It is a very important international body. It has 50 member States and it really handles all the regulations and international rules around the grape-growing and wine industry. I acknowledge in the Speaker’s gallery members of New Zealand Winegrowers, who were here earlier this evening. So it’s quite appropriate that we have this cellar door bill up in front of the House today. We’ve got this anomaly in the law that I’ll go into shortly that is really quite anomalous. It’s quite a lot of silly bureaucracy that just needs to be fixed, so that’s what this bill endeavours to do.

The wine industry is the sixth-largest export good by value, and, actually, what’s not covered in that is that the main markets for wine are actually OECD countries, so higher-income countries where higher values can be obtained for goods exported there. And the halo effect of our wine exports into those markets is, I think, often undervalued. Those customers that buy our wine are discerning consumers and they, from buying our wine, get an impression of a country that can produce high-end, high-quality products, and that goes much wider than the wine industry.

But it’s also very important, the wine industry, as a tourism offering. It’s the second-largest export industry effectively—the tourism industry. And that brings in a lot of valuable foreign exchange for New Zealand, and all of our wineries cellar doors are benefiting from that. High-end tourists go around the country to cellar doors. They incorporate that as part of their tourism experience in New Zealand.

I asked the library to research for me where cellar doors were in New Zealand and in which electorates, because I thought it would be quite a good idea to lobby the members of Parliament. Many of you have been lobbied and some of you have done a great job of lobbying on my behalf, and I really thank you for that. I was surprised by how many electorates have them. Who knew there was one in Taranaki - King Country? They all provide—

💬 Hon Member: Barbara Kuriger knows.

Yeah, Barbara—yes, Barbara knew. [Interruption] Yes, I know; I’m coming to Tukituki. This is great. I’m having quite a bit of input from the other side. I really appreciate that. So it actually touches almost every electorate, and I have visited cellar doors from Northland and all the way to Otago and, as you can see, I have not suffered from it. So I highly recommend it.

But on to serious business. There are two gaps in the Sale and Supply of Alcohol Act 2012 that have really caused quite a lot of issues for the wine industry and this bill seeks to deal with those. Cellar doors cannot charge visitors for the wine samples that they taste. They are not able to do that. It’s a premium product and a premium experience, but that devalues it. Of course, cellar door profitability is impacted by that and it often leaves the customer in an awkward position, feeling like they’re obliged to buy some wine. I’ve been in that position. I know how they feel and it’s awkward for the winery as well.

This bill allows winery cellar doors to charge for the samples of their own wine they serve to their visitors. Reflecting current industry practice, a sample will be defined, which is not currently defined under the Act, and it is limited to a maximum of 40 millilitres. Currently—we have tested this—most of the samples are about 30 millilitres, but if you make it 30, then people are likely to be occasionally over the limit. So if we make it 40 millilitres, that is approximately 18 samples per 750 millilitre bottle. So it’s not a lot of wine.

Second, the limited categories of off-licence available to a winery under the Act mean that all the winery cellar door licences are granted under section 32(1)(b), which is available to retail businesses where at least 85 percent of their revenue comes from off-sales. So this means, in effect, that if a winery is both a cellar door and a cafe or restaurant, their revenue from the restaurant will normally mean that there’s much less than 85 percent of the winery’s total sales coming from off-sales. So to fit within that, they’re typically forced to create a separate legal entity as a cellar door and then apply for an off-licence. This forces wineries into creating a new business, adding cost and complexity, and does nothing, actually, to advance the objects of the Act—and I’ll come back to that shortly.

This bill corrects this anomaly by adding a category of off-licence available to wineries holding an on-licence, such as a winery or a cafe. Definitions of “winery” and “winery cellar door”, which reflect the current use of those terms, are in the bill.

So the object of the Act is that the sale, supply, and consumption of alcohol should be undertaken safely and responsibly, and that the harm caused by the excessive or inappropriate consumption of alcohol should be minimised. This bill will further that object, in my view.

Regulations under the Act already recognise that winery cellar doors are the lowest risk category. So that’s already been covered in the Act—it’s viewed as a very low-risk entity, and I think anyone who’s ever been to a cellar door will know that.

For any members who feel a little bit of a reluctance to support this bill, I urge you to vote for it and send it to the Justice Committee. I’m sure we will get lots of submissions from wineries and from people involved in the licensing of such entities. I think it’s a really good opportunity to air those views in the select committee.

I know I’m biased—I came from the wine industry. I remember, some years ago, before I came into Parliament, when I was on the board of New Zealand Winegrowers, we thought about if could we get to $2 billion worth of exports, and we would make that as a target. Well, it is $2.41 billion currently. Part of the success of the wine industry actually comes from the cellar door experience of people coming to New Zealand to visit it. We see tourists from all over the world, in a campervan, going around and visiting cellar doors all over the country. And that is so good for our regional employment. It’s good for the cellar doors, obviously, but it’s also good for the other businesses that benefit from it.

After Cyclone Gabrielle—so, Anna, I did say I’d get to this—in Hawke’s Bay and Gisborne, really, they’re struggling as it is. They’ve had a terrible experience with that cyclone. Let’s make it easier for those wineries to make some more money and sell some of their wine and get them back on their feet. So I commend this bill to the House.

The question is that the motion be agreed to.

Thank you, Madam Speaker, and it is a great pleasure to rise and take a call on this member’s bill. Congratulations, Mr Smith, on the Sale and Supply of Alcohol (Cellar Door Tasting) Amendment Bill.

It’s not unusual for us to bond across the House over such wonderful things like Marlborough and Taranaki and, of course, wine. At this time you reflect; it’s often a conversation around primary industries. We all start to reflect on our shared connection and our shared heritage, and the connections that we have with the wine industry is just one of those. I spent most of my summers in Marlborough, and I can remember having friends and going from watching the sheep in the Wairau Valley to clipping the garlic, through the summers, and then on that same piece of land owned by Peter Jackson, I can remember my first year at university learning how to tie up those first lot of vines which now are part of a multibillion-dollar business.

I can remember friends at university, at Lincoln, who came off the hills—they were pretty good at looking after sheep—and then going on and doing their postgrad in viticulture because they knew that was the future, and then becoming international winemakers. So my peers, I’ve watched them and how primary production has changed in that valley, and how it’s not just changed the landscape but the way we live our lives down there.

We’ve all been to weddings at wineries and many of us have worked in them and we know, looking after our visitors, and it’s a wonderful experience. So it is part of our culture, not just a part of the narrow word of “the economy”. So it is really great that the care has been taken to fix up this frustration.

As we’ve already heard from our member over the way, this is complicated and messy, and it’s been really frustrating. We’ve heard a lot of the details about the difference between an off-licence and an on-licence, and if you have an off-licence you can’t charge, and if you have an on-licence you need to get the off-licence so that you can’t charge, and it all seems a bit muddly. I guess that bringing this legislation up to speed and modernising it is a wonderful thing to be doing.

We’ve got over 600 small wineries, and over the years we’ve seen some really innovative entrepreneurs who, like my brother, have literally put those posts in and planted grapes, right through to big growers and winemakers and multinational companies. We have 600 small growers and this will be really impactful for them. We heard about how things during COVID were really difficult when they couldn’t have cellar door sales. But what it did, I guess, COVID, with so many things, is it reminded us of what was important and it wasn’t just selling stuff but that experience. I think we’ve already heard about the high-value experience and the wine that we grow and sell right around this country and that cellar door experience being one that we want to make sure that we can continue, especially with our small winemakers.

We heard them saying, “We might have six visitors in a week and we might open 12 bottles of wine and they last three days and, jeepers, that’s quite an investment when you might not end up selling anything.”

💬 Nicola Grigg: Twelve bottles of wine in three days—crikey!

And for a small cellar door, you might not drink at all—do the math. OK.

💬 Nicola Grigg: I’m not judging.

OK, you’re not judging. Oh, that’s good to hear. It’s really interesting hearing how important the wine industry has become to our international trade; you know, sixth largest export. The UK’s our second largest export market for wine, and it was really exciting this year when we signed the free-trade agreement with the UK and finally got those tariffs taken off, and we’ve started to fix some of the bureaucracy and some of those barriers that have come in over the years around labelling and all those sorts of things. So this industry is huge and it’s only going to get bigger because of the fabulous commitment that this Government has made to realising the dreams about opening up international markets and supporting all of our wineries in that way.

This is a sensible piece of legislation. It’s wonderful to see the care and the detail that has been put in. The difference between 30 millilitres and 40 millilitres—really interesting stuff. And the great thing about this is that it is really going to be supporting innovation. Our small winemakers operate differently in our community down in Marlborough. They employ people in a different way. They consider how they invest in their land and how they treat their land quite differently. They are our innovators. It’s really exciting when you go to one of those small wineries, whether it’s in Taranaki or on the East Coast or down in Marlborough or Central Otago. It is those small players that we really want to make sure that we pay attention to and that we support.

It just doesn’t make sense when you start sort of unravelling it and going, “Oh, well, you know. Just open a cafe.” Well, people who make wine want to make wine. And they want to have conversations with people at the cellar door about the wine that they make. Some of us have had the privilege of going to cellar doors in other parts of the world—literally a cellar door in a cave in France—and there’s no problem. Sometimes you’ll get your 40 millilitres for free, but it’s not unusual to be asked to make a small contribution. And I can remember being in Europe and actually feeling that I could go to the cellar door and spend a few francs on a little bit of wine and not feel really stink about it, rather than going along and having a few nips here and there of wine and then being expected to buy a nice expensive £40 bottle of wine. So actually we never went and enjoyed the experience. And while I never would have been somebody to go and buy the expensive French wine at the cellar door at the time, I’m much more likely to come back to New Zealand and buy my French wine or have a slightly more sophisticated pallet because I’ve been able to get access to the culture of wine. Now, how is that for a really good reason for having a glass of wine?

There will be concerns, of course, raised about anything that comes to this House that is dealing with the sale or the control of alcohol. So we should consider this bill really carefully. I’m a little disappointed that I’m not on the Justice Committee. Maybe the Primary Production Committee should have a good crack at it, but I understand the reasons why it is there. So the other thing that we need to make sure of is that it will go to the committee and it will be dealt with really thoughtfully, as it should, because this is a conscience vote. It is a matter for us to consider very, very seriously. And that is why people will have the opportunity to argue against the bill. It is important that we can do that. And we’re really, really looking forward to seeing this come back to the House. It will be great to be able to read the submissions from all of those who will be impacted positively. And it is nice to have an excuse to focus on and celebrate one of our favourite—oh, are we allowed to have favourites?—primary industries, and then to welcome the bill back to the House. So I wish the Justice Committee all the luck in the world. I’m sure they don’t get such lovely bills coming through all of the time. And then we will expect to see a fabulous bill come back to the House.

So this is for all of the people in the industry, whether they are working at the cellar door, whether they’re making sure those grapes are well and truly mushed up into a beautiful, beautiful glass of wine—those who have really been in there from the beginning. Marlborough is relatively young compared to some parts of the country, but it is a wonderful part of our global brand and it’s got a long way to go and it’s nice to see someone paying attention to the little things that will really, really make a difference. I look forward to hearing a good conversation about definitions of wineries and cellar doors. Maybe they should all be in caves, I’m not really sure. So it is because of this that I recommend this bill to the House.

Debate interrupted.

Members, this debate is interrupted and the House stands adjourned until 2 p.m. tomorrow.

The House adjourned at 9.56 p.m.