Introduction

Why should you, the readers of Wine Companion, be concerned about the economic health of Australia’s winemakers? Well, in the broad sense it is self-evident: a profitable operation will allow winemakers who care about the quality of their wine to reinvest some or all of their profit in their vineyards and/or their wineries.

The chilling reality is that less than 20% of Australia’s 2800-plus wineries make a profit. How much less, and the method of calculation, are the devils in the detail. It seems topical to say that most of the 1700 wineries crushing less than 100 tonnes per year are negatively geared.

Those that may be profitable are mostly in regions with a high level of wine, food and lifestyle tourism activity. It is these wineries that were attracted to invest by the (maximum) $500,000 per annum rebate of the 29% wine equalisation tax (WET), which they would otherwise pay on the proceeds of sales direct to the public at their cellar door or online.

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