Monday, 24 February 2020
Wine Australia Amendment (Label Directory) Bill 2019; Second Reading
Labor supports the passage of the Wine Australia Amendment (Label Directory) Bill. The bill's primary purpose is to allow Wine Australia to establish a label directory, which will include digital colour images of grape product labels and information in relation to the grape products and those exporting them, to enable Wine Australia to use the label directory as a part of its role in controlling the export of grape products under the act and regulations. According to the explanatory memorandum the purpose of the label directory is to deter exports of copycat wine from Australia. This is a good thing, as copycats of our great Australian wines have a massive impact on our wine producers. Copycats should not gain commercial benefit from the high-quality Australian brand that our wine producers have developed. It's their hard work that created the brand. This should be protected.
However, it is important to note that the bill does not give Wine Australia the power to protect the intellectual property rights of wine brand owners. The bill will only better facilitate wine brand owners to protect their own interests by being able to search the database to easily see whether other labels may be seeking to trade off their intellectual property so they can undertake appropriate civil action against copycat exporters.
The bill enables Wine Australia to take into account the behaviour of wine exporters using the label directory in administering licences to export grape products. That means that when exporters are trying to take advantage of the good name of Australian brands or using untruthful or non-compliant labels Wine Australia can suspend or cancel their licence to export.
However, whilst the bill before the parliament will assist wine producers to better protect their brand from copycat behaviour, many wine producers are concerned about the impact that climate change is having on their industry and Australia's wine industry's reputation. This is why I will be moving a second reading amendment condemning the government for its lack of understanding about the impact climate change is having on Australia's wine industry. The rapidly changing climate is having a significant impact on the agriculture sector, and viticulturists want the government to act meaningfully on climate change.
For many viticulturists, the recent fires have had a significant impact on their wine-producing regions. On 9 January 2020, the peak industry organisation, the grape and wine association, Australian Grape & Wine—known as AGW—provided an update on the impacts that the bushfires have had on various wine-producing regions. In terms of the effects on the Hunter Valley region and the 2020 vintage it really is still too early to tell. The update reads:
Smoke taint is a reasonably new and inexact body of science, and the region is currently working through all the options and procedures at their disposal to evaluate any perceived risk.
However, experienced wine producers, such as Bruce Tyrrell, have had to make difficult decisions to ensure the brand of their wines, stating:
… the company had decided most of its vineyards would not be harvested for wine production and it would have a severely reduced 2020 vintage. Overall the drought and smoke taint would bring a grape crush 80 per cent below normal.
Smoke taint gives grapes—especially reds—burnt, smoky, medicinal or "dirty ash tray" characters that are reproduced in the wines.
Much of south-eastern Victoria has been subject to fire. Gippsland has suffered severely, and Rutherglen, King Valley, Beechworth and the alpine regions are vulnerable in the next few weeks. This could bring up to 10,000 tonnes under threat. The update went on to say that in the Adelaide Hills:
To date, the fires have impacted more than 60 grapegrowers and wine producers and the flow-on effect within the region will be severe.
The devastation has hit close to home for growers, producers and wineries in the region with significant loses of vineyards, buildings, equipment, machinery and wine.
But it is not just the fires. Drought is also having a significant impact on wineries in our wine regions.
There are media reports that farmers in Stanthorpe are facing difficult decisions about whether future generations will be able to continue farming the region and they want real action from the Morrison government. Stanthorpe media are reporting 'dirt underfoot as dry as anyone can remember, Mike Hayes sees numbers everywhere as he walks through dusty rows of grapevines'. The article continues:
To say Hayes is unimpressed with news of a regional drought tour by federal Treasurer Josh Frydenberg and senior Coalition MPs this week would be an understatement.
They'll come in their flash RM Williams and their Akubras and their imported polo shirts from France, thinking they're super cool.
I'd like to get them out in the vineyard and spend a couple of days working, tasting and eating the dust, facing extreme temperatures we haven't seen before. It might just wake a few of these politicians up.
Wine producers want real action, not drought tours, which at best usually deliver concessional loans with headline announcements such as '$8 billion in drought support.' The Morrison government is fooling no-one, and our farmers deserve better.
Climate change is forcing Australia's struggling winemakers to adapt. In August last year, Hunter Valley wine producers, Tulloch Wines, shared the challenges they were facing because of climate change. Mr Tulloch is quoted as claiming:
The extreme drought has affected the yields on some our vineyards—some dropping beneath 25 per cent of what they had previously yielded.
With climate change presenting an increasing threat, winemakers are being forced to adopt new measures to combat the challenges.
We've invested a lot of money in irrigation in our vineyards which previously weren't irrigated and that's been a response to more frequent and more intense droughts.
The article that quoted Mr Tulloch continues:
Climate scientists warn the increasing challenges to grape-growing reflect the vulnerabilities of the entire farming industry.
"[It] just reflects what's happening much more broadly across the agriculture sectors," said Professor Mark Howden, director of the Climate Change Institute at the Australian National University.
"Climate change is already [having] an impact, not just based on the amount of product that they can grow, but also on the quality of product."
Whilst Australia's wine production is a high-value product known for its high quality, the future of the industry will require meaningful action on climate change to ensure that the industry can further adapt and build resilience and mitigate the impact of climate change. But, sadly, the Morrison government continue to be focused more on their own internal machinations than prioritising developing an effective climate change policy.
The department of agriculture has officially changed to its new structure as the Department of Agriculture, Water and the Environment. The department also obtained two new ministers, albeit Minister Littleproud was given back his old job. Minister Pitt is the new water minister—and hopefully the working relationship between Minister Littleproud and Minister Pitt will be a better working relationship than what existed between Minister Littleproud and the former Minister for Agriculture, Senator McKenzie—and Andrew Metcalf was reinstated as the secretary to the department of agriculture, after the Abbott government sacked him back in 2013. But these changes cannot be used as an excuse by the government to continue to not act on assisting farmers to build resilience and to adapt to the challenges that climate change presents. The Morrison government love to blame bureaucrats or the states for policy failings. However, the Public Service is there to serve the government of the day, and this can only be done if there is a clear mandate from the government of the day. Changing ministers and departmental secretaries, and moving portfolios, do nothing to assist our farmers dealing with the challenges of climate change.
Ironically, the former, former, former—sounds a bit like Monty Python!—agriculture minister, Barnaby Joyce, asserted that the water portfolio could not sit with the department of the environment because the latter was captured by the green movement. Yet now both agriculture and water can sit with the environment department. So the question is: why did the water portfolio need to be moved in the first place? It was purely for National Party optics. Remember that locating water in the agriculture department and under the responsibility of the then minister Barnaby Joyce was the deal done when former Prime Minister Tony Abbott was knifed in the back. Of course, leadership instability continues to plague the coalition, as the National Party almost—almost!—saw the return of Mr Joyce to the helm. Whilst Mr Joyce did not get across the line this time, it did expose the fractures that continue to exist in the Liberal and National parties with regard to climate change policies.
What happened in the first parliamentary sitting week for 2020 will give Australian wine producers absolutely no confidence that the Morrison government have their industry at front of mind. The recent rains around Australia, which are welcomed by all, should not be used as an excuse by the Morrison government to do nothing. The agriculture sector, including fisheries and forestry, want a coherent national strategy for agriculture. This plan will need to include meaningful action on climate change; otherwise their vision of reaching $100 billion by 2030 will be difficult to achieve.
The Wine Australia Amendment (Label Directory) Bill 2019 enables Wine Australia to establish and maintain a publicly available directory of grape product labels intended for export. We know that Australia has a very significant wine industry and a very significant wine export industry. Based on the recent data in the Bills Digest, we produce around 1.7 million tonnes of wine grapes a year, we consume 492 million litres of wine a year, we export 866 million litres of wine and we imported 100 million litres of wine. Over time Australia's largest export markets have shifted from being predominantly the US and the UK to a greater volume going to China and South-East Asia.
In 2017 we had the reports that there were 14,000 bottles of fake Penfolds wine that'd been stopped from sale in Shanghai. This bill is intended to address situations like that situation. This bill enables Wine Australia to create a directory of labels as part of export controls—all very good. The Greens are going to be supporting this bill because, yes, it's a useful thing to be doing, but we do question the priorities of the government. We do question whether this is actually the most important thing to be tackling to support our wine industry. The coalition is being quick to protect Australia's wine industry when it comes to protecting the intellectual property of our major producers but there is a massive looming challenge. There is a massive elephant in the vineyard that the coalition is failing to act on and that is our climate emergency.
We have seen the impact that our climate emergency has had on wine growers this summer. With the fire emergency that we faced we need to look no further than right here around Canberra where we have Canberra wine growers who are basically saying, 'There's no vintage this year because of the fires around Canberra.' Tim Kirk is from a Clonakilla wines, who are based in Murrumbateman. They usually produce between 15,000 and 20,000 cases of wine each year. They made what they describe as the 'painful' decision to not have a 2020 vintage. 'It's been pretty devastating actually,' said Mr Kirk. He said:
We've had bushfires before, but this was something else. The fires all around us, we just seemed to cop all of smoke and it hung around for weeks and weeks.
What happens is it sits on the skins of the grapes and gets sucked into the grapes as they start to ripen. Once you crush the grapes and begin to ferment them, those smoke compounds are released into the wine.
He says with some understatement:
It is not what you want with a great Canberra district wine.
Mr Kirk also said:
The impact is going to be significant, there's no doubt about that, and it will be quite a heavy financial blow for us.
He estimates the loss to their winery in the millions of dollars. He said:
We're not going to make any wine from this vineyard at Murrumbateman, or indeed any of our vineyards from suppliers that we have in the Hilltop district or the Canberra district.
We've been in this game a long time, it's 50 years next year. We've never actually written off a whole vintage before.
There you go. This is the real emergency. This is the real issue that wine growers in Australia need to have this government addressing. If we don't address the climate emergency no amount of fiddling around the edges and providing registers of wine labels is going to mean the ongoing financial viability of our wine industry.
This summer we had the issue of smoke taint. It's not just in Canberra where it was felt. With our fires that we've had this year we know that fires of this extremity, fires of this intensity, the longer fire season, the smoke hanging around, are going to be signs of things to come unless we address our climate emergency.
Then you have got the issue of the hotter conditions—the rising temperatures that come with climate change. I would like to talk about a study that I have got a particular personal connection to, which my late wife, Dr Penny Whetton, was an author of in her role as being one of Australia's leading climate scientists. It was a paper entitled 'Observed trends in wine grape maturity in Australia' published nine years ago now in Global Change Biology in 2011. That research was based on studying data from vineyards around Australia over very long time frames. Some of it was from over 115 years of data. It showed very clearly the impact that a hotter climate was having on our wines. Over the 1993-2009 period the grapes matured, on average, 1.7 days earlier each year. Crucially, the paper summarises:
The trend to earlier maturity was associated with warming temperature trends for all of the blocks assessed in the study.
Again, this is what we need to be addressing. This is the urgent issue. This is where there needs to be urgent action from everybody in this place—the government, the Labor Party, the crossbench and certainly us Greens. You know that we want to see the urgent action, of the speed and scales that are required, in order to rapidly reduce our carbon pollution to zero. And it is not just about just leaving it until 2050—net zero carbon by 2050. Look, that may be great, but it also may be too late. We need urgent action now, not just fiddling around at the edges.
Putting aside the whole issue of the impact of our climate crisis on grapes and focusing on new wine labels: the experience of our wine growers with the increasing impact of our climate crisis shows that, tragically, it is being felt now. Just as the fires showed that we are in a climate crisis, there is no escaping it. The impact of those fires was felt, and so is the impact of a hotter climate being felt. Alisdair Tulloch, from Keith Tulloch Wine, stated:
You need to pull the camera back further than the bushfires themselves and the way they are influenced by climate change to look at the broader picture of grape growing in general. Grape growing has been showing the fingerprints of climate change since the 1980s when the harvesting dates began to move forward.
And of course we know that the climate crisis has affected not just the wine industry. It's affecting our agriculture sector more broadly. A recent report by ABARES estimated that climate-related losses are on average about $1.1 billion per year for the broadacre property industry.
If there was any other factor—whether it was invasive species, coalmining or another issue—that was costing farmers over $1 billion a year, surely this government would be acting to address that issue. Instead, we're being told: 'Don't worry. We've got it under control. We're going to meet our Paris targets, and everything's okay.' But it is blatantly clear to everybody—you cannot fool the community—that the action that is needed, that is required to reduce our carbon pollution, is needed much more urgently and at a much greater speed and scale than this government is doing. While we've got a government that continues to be spruiking coal, to be spruiking the opening up of the Beetaloo Basin, to be fracking gas, we are not addressing our climate emergency. We are not addressing the impacts of climate change on agriculture. We are not addressing the impacts of climate change on our wine industry.
This is what needs to happen if we are concerned about not just our environmental viability but also the economic viability of this country. On any other issue that was causing losses of $1.1 billion a year, this coalition government would be acting to address it. There'd be a special envoy, there'd be a series of summits and the minister would make announcements of multimillion-dollar government programs. There would be at least an attempt at action. But this government's not acting on the climate emergency. And do you know why? Because while they talk up big about supporting farmers, we know who is really pulling the strings. We know who they are listening to, and that is their fossil fuel donors—the coal dinosaurs who will not accept the truth or act on it, and a Prime Minister who still fondles lumps of coal and refuses to engage on the issue.
In 2007—if you want to go to the impact that climate change is having on our agricultural industry—the Howard government's drought package included exit packages worth $150,000 to farmers. This is what one scientist commented in 2007. Professor Peter Cullen, of the Wentworth group of scientists, said:
… this would enable farmers to exit the land with dignity.
Australia is going through a horrible transition as we adjust to climate change and there are places where farming isn't going to be able to be continued.
These are the issues. This is what this government needs to be focusing on, rather than just fiddling around the edges with small things like putting together a register of wine labels. Yes, a register of wine labels is all very good, but it is tiny in significance compared with what we need to be doing on our climate emergency. More recently, the National Farmers Federation called for exit packages as well. Fiona Simson, the head of the NFF, said of exit packages that they would:
… provide some support for those people making the difficult decision and enable them to establish themselves in a new location, with a new future in front of them.
The coalition government could be exploring exit packages as a way to make land sustainable and supporting farmers in the middle of our climate emergency. Instead, it's continuing to bury its head in the sand.
We need leadership from our government. That's what the community want. They want leadership. They want action, not just fiddling at the margin with export labels, to be meaningfully addressing our climate emergency. So the Greens will be supporting this bill. It's a bit of legislation that, yes, is going to go some way to improving things—to stop fake wine labels being used abroad, protecting our wine producers—but it is tiny in the larger scheme of what needs to be addressed to ensure a positive, robust and sustainable future for our wine industry, for our agricultural sector more generally and for all of us—for us, our children and our grandchildren.
I rise today to speak in support of the Wine Australia Amendment (Label Directory) Bill 2019. It's one that supports Australia's wine producers and the integrity of their product. Australia is the sixth-largest wine producer in the world and the fifth-largest wine exporter, with two-thirds of Australian wine exported, adding $2.89 billion to the economy annually and employing over 170,000 workers in the industry.
My great home state of Victoria has a fantastic wine industry, one of the best in the world. There are over 1,100 wine producers in Victoria, with over 740 vineyards spread right across the state. The people here and those listening at home might be familiar with some of these regions—the Yarra Valley, the Bellarine and Mornington peninsulas, Rutherglen, Pyrenees, Goulburn Valley and more. These predominantly small and medium businesses employ nearly 13,000 workers in both direct production and associated industries. Some of those industries include tourism. They contribute over $7.6 billion to Victoria's economy. They supply 19 per cent of Australia's wine production to a range of producers who export right across the world. Their hard work, innovation, experimentation and high-quality production has seen Victoria develop an enviable reputation as a producer of high-quality varietals of all types, some of which now challenge and beat the traditional exporters from Europe and North America.
It is this kind of hard work and success that the Morrison government want to support. We've boosted the Export Market Development Grants scheme by $60 million to back small and medium-sized Australian exporters, including our wine producers. We, the Morrison government, have delivered trade agreements with China, Japan, and Korea, all growing wine markets. We've signed the Pacific Agreement on Closer Economic Relations, as well as agreements with Indonesia, Peru and Hong Kong. As a result, Australia's exports increased to a record $438 billion in 2018, up from $307 billion in the financial year 2012-13. In 2018 Australia had a trade surplus of over $22 billion, compared to a deficit of $19.9 billion in financial year 2012-13.
Our wine industry will also benefit from the new Trans-Pacific Partnership. It is an agreement between 11 major economies in our region with a total worth of over $13.7 trillion. Through these initiatives, we have opened up new opportunities for all of our exporters, including our wine exporters. We will continue to help them grow and prosper.
However, this government hasn't just left support for small business at that. Other initiatives include reducing the tax rate for businesses with a turnover of less than $50 million from 30 per cent to 27.5 per cent, the lowest rate in 50 years. This will support some 230,000 small and medium-sized companies in my home state of Victoria alone. For unincorporated businesses with a turnover of less than $5 million, we have introduced a tax discount of eight per cent, capped at $1,000, and we have legislated a further increase to 16 per cent—a great boon for all small and medium-sized businesses. We have fast-tracked this tax relief so the full benefit is delivered in the financial year 2021-22. That is five years earlier than originally planned.
The Morrison government is also helping small and medium businesses invest and grow through the instant asset write-off. We expanded the instant asset write-off for small and medium businesses up to a turnover of less than $50 million until 30 June this year. This means those businesses can instantly deduct each and every asset under $30,000. You can imagine that for a small to medium primary producer, like a wine producer, this means everything. This gives them the help that they need in real and meaningful ways. These changes will benefit 3.4 million businesses employing over seven million Australians, helping them to invest, create more jobs and develop further export opportunities.
Success, however, can be impacted by a range of issues. Factors such as drought, bushfires and plant disease can impact on crops and the quality of the product. Factors such as low wholesale prices, oversupply or export controls can impact growers' profitability. That is why the Morrison government has also announced a range of initiatives to help agricultural producers and small businesses through the impacts of drought and natural disasters. These include more than $1 billion of drought loans, worth individually up to $2 million, with no repayments or interest for the first two years. This will make it possible for some agricultural producers to buy fodder, transport stock, build water infrastructure, agist animals, mend fences or refinance existing debt. There is also a new small business drought loan of up to $500,000 that will help support small regional businesses impacted by the drought.
Unfortunately, wine producers have experienced various nefarious activities by people seeking to pass off inferior products through copycat wine and other grape product exports. The wine industry regulator has seen products exported from across the country with labels that seek to mimic elements of Australian brands for commercial gain and unfairly benefit from the reputation of those brands. They are damaging the hard work of reputable wine brands and threatening the continued growth of the wine industry not only in my home state but right across Australia. That is why the regulatory work of Wine Australia is so important. The continuing success of Australian wine exports depends on the maintenance of our internationally recognised reputation for quality and integrity, and that is supported by Wine Australia's regulatory activities.
The Australian wine industry asked for stronger regulatory controls to deter the export of copycat wine from Australia. The passage of this bill will enable a label directory to be established as part of Wine Australia's export controls. The directory was proposed by industry as one way of assisting brand owners to protect their intellectual property rights and, by extension, the reputation of Australian wine. It will act as a deterrent to exporters of wine and other grape products who seek to damage Australia's wine industry and unfairly benefit from the reputation of Australian brands. The label directory will provide brand owners with a searchable database of images of labels that can be used to find labels that potentially infringe their intellectual property rights and enable them to undertake civil action against copycat exporters through the Australian legal system. The bill will also enable Wine Australia to use the label directory in administering licences to export wine under the Wine Australia Regulations 2018.
One of the great challenges of creating a regulatory regime is ensuring that it does not create an undue burden on those who seek to work within the regulations. This government has actively sought to reduce compliance costs for businesses, individuals and community groups and has removed over $6 billion of regulatory burden since coming to office in 2013. This includes simplified business activity statements for 2.7 million small businesses, doubling of ASIC financial reporting thresholds, reducing the burden on 2,200 companies, a small business superannuation clearing house and hundreds of other decisions that are making life easier for our small businesses, including our wine producers and exporters.
To help reduce state government red tape, the government will pay up to $300 million to states and territories that reduce the regulatory burden on small business, assuming they deliver on the promises that they have made. As part of that effort I acknowledge my colleague Senator Bridget McKenzie, former minister for agriculture, for her work on this policy piece. I also thank the Department of Agriculture, Wine Australia, IP Australia and the Department of the Prime Minister and Cabinet for their work on this bill that is now before us. I commend the bill to the Senate.
I'm really pleased to speak on the Wine Australia Amendment (Label Directory) Bill 2019 because I'm a big supporter of the wine industry in Australia, especially in South Australia. I'm always going to be pleased to support legislation that will make the work of this important industry easier and, credit where credit's due, this bill does do that.
To be clear, this bill aims to amend the Wine Australia Act 2013, to enable Wine Australia to establish and maintain a publically available directory of grape product labels intended for export. The purpose of the label directory is to deter exports of copycat wine from Australia. This bill does not give Wine Australia the power to protect the intellectual property rights of wine brand owners. However, it will better facilitate wine brand owners to protect their own interests by being able to search the database, to easily see whether other labels may be seeking to trade off their intellectual property, so they can undertake appropriate civil action against copycat exporters.
Anyone who is familiar or has a relationship with the wine industry would know that this is a significant issue for industry. The issue around copycats has certainly affected a lot of businesses in South Australia. So any work that seeks to address that is work that the Labor Party obviously would support, particularly for the industry in South Australia, where some of our best known brands globally and the most important wine exports for Australia are located. On that note, I draw attention to a fantastic winemaker in the chamber at the moment in Senator Farrell, who, I am sure, will be welcoming the provisions within the legislation.
But this bill isn't enough or sufficient to do all we know that we need to do to be supporting our wine industry, because we're at a critical juncture for this industry. This is particularly true in my home state of South Australia. The wine industry in South Australia suffered enormously in the recent bushfires, especially in the Adelaide Hills. The Cudlee Creek fire that tore through the Hills region claimed 25,000 hectares. I visited Cudlee Creek a few week ago and was able to see the impact of this firsthand—in particular, at Petaluma Wine, in Woodside, in the Adelaide Hills. Petaluma was one of dozens of affected wineries in this region, and the impact of the fire is clear to see, not just within Petaluma's property but in the surrounding properties.
I witnessed blackened soils from eerie patterns on the ground, showing the seemingly random path of the fire through the vines. I saw vines completely burnt, vines that had been spared and areas where the fire appeared to have jumped certain parts of the property and the vineyard. I saw vines shrivelled to ash and buildings gutted in its wake. Grand centuries-old gum trees adjacent to the cellar door are now blackened through sections of their trunks. Some of these will survive, with the scars a constant reminder, but others won't.
Petaluma estimates significant losses to production for the year. Yet this winery was relatively fortunate if we compare it to other wineries in the Adelaide Hills. Their cellar door is still intact, which means they can welcome visitors, they can still showcase their wines and they can still be part of that critical tourism infrastructure that is so important to the Adelaide Hills, and they still have some vines for future production. Others have absolutely nothing left. Vinteloper was completely engulfed, losing all of their vines, their cellar door and even the owner's home.
But across the Adelaide Hills, in true South Australian style, there is a widespread resolve to rebuild and regroup. It speaks volumes to the character of the wine industry that there is widespread determination to recover from this bushfire disaster. In listening to what some producers need, through recovery support, what I heard clearly was that the recovery is only just beginning and it will be a process that takes many, many years. The industry will require our significant and long-term support. All wineries are different, of course, and their recoveries will take different paths and they will have different needs. Some will need large distributors, like Coles and Woolworths, to be flexible with supply over the coming years, so that they can maintain important existing distribution agreements. Some will need weekend tourists to accept, for a while, some reduced amenity whilst they're visiting. What they will need is a continuing effort from consumers to buy local and to make a special effort to seek out local produce and local wines. What they need desperately is the support of our parliament.
Though there is a long and difficult process ahead, there are signs of positivity, there are signs that this recovery is already underway. Vines that shrivelled in the bushfire heat but stayed alive are now pushing out small green bunches of new grapes. On the backdrop of the black earth, vibrant green grass shoots provide a stunning reminder of nature's incredible capacity to renew and regrow. The winemakers are testing their fruit to assess the impact of the bushfire and the smoke aftermath on the quality of the fruit. The Australian Wine Research Institute will apply knowledge gained from previous bushfires to support producers through this disaster. I want to put on the record what producers have been telling me, which is that they have just absolute praise for the Australian Wine Research Institute and the work they have been doing to actively support them.
As a parliament we should be working to ensure practical support is provided to the right areas to help producers return to business as usual as quickly as possible. Bills such as this is an important way to support the industry. But there are, of course, bigger issues that we as a nation must be tackling to be able to say with confidence that we are doing everything we can to support our wine industry, an industry that substantially provides for our broader economy.
South Australia's five world-renowned wine regions in the Barossa Valley, McLaren Vale, Clare Valley, Coonawarra and the Adelaide Hills, as well as the other regions in our state that are producing top quality wine, account for almost 80 per cent of Australia's premium wine production. So protecting local South Australian wine brands is vital not just for my state of South Australia but also for our national wine industry. In 2017-18, South Australia's wine industry generated more than $2 billion in revenue, with $1.8 billion from exports to more than 100 countries. Australian wine exports have continued to grow in the 12 months to June 2019, increasing by four per cent in value to almost $3 billion. In 2017-18, Australia consumed over 400 million litres of wine but exported more than 800 million litres—double the amount consumed locally. Clearly this is a critical industry for our broader economy. South Australia is charging and fuelling that industry and its growth.
So especially at this time, a time when our South Australian industry has been devastated by these unprecedented bushfires, we need to be doing everything we can to support our wine industry, to support our producers and to support the people in South Australia whose jobs are dependent on the success of these businesses, on the exports of these businesses. That is absolutely critical. We need to do more than just provide monetary support and short-term support schemes. We need a long-term plan and we need to listen to people in this industry who are concerned about the broader changes ahead for their industry. I'm speaking specifically here about the challenges that climate change will present to this industry and to producers.
On 9 January 2020, the grape and wine peak industry organisation, AGW, provided an update on the impacts the bushfires have had on various wine-producing regions. To date, the fires have impacted more than 60 grapegrowers and wine producers in the Adelaide Hills. The flow-on effect within the region is going to be severe, clearly, with this level of impact. The devastation has hit close to home for growers, producers and wineries in the region, with significant losses of vineyards, buildings, equipment, machinery and wine. Equipment is an important part of the story, but, of course, insurance often covers the cost of equipment and we can rebuild. The damage to the wines, the damage to the other part of the infrastructure, the damage to the natural environment, the damage to the precious things that were also burnt cannot be replaced.
After a challenging season of the extreme heat that we have seen, of drought, of catastrophic bushfires, it is so clear that this industry is hurting. It is hurting deeply. We have to be clear when we're talking about this, if we're going to be meaningful and impactful in the ways we want to support this industry, that we acknowledge that the severity of this bushfire season and the extreme weather that exacerbated conditions has resulted from our changing climate. There's no stepping away from that. The science is very clear. Australia's wine industry is on the front line of climate change. They have an incredible amount to lose if we do not take action on climate change seriously. Climate scientists warn that the increasing challenges to grape growing reflect the vulnerabilities of the entire farming industry. As Professor Mark Howden, director of the Climate Change Institute at the ANU, recently stated, climate change is already having an impact not just on the amount of product they can grow but also the quality of product. Our rapidly changing climate is having significant impacts on the agriculture sector more broadly, but of course particularly on our winemakers, who want the government to act meaningfully on climate change.
South Australian wine growers have stated that the dramatic shift in harvest dates is just one of the things that are taking a toll on their businesses. In response to this they have invested significantly in irrigation, solar and other measures to combat these challenges. But it's not a fight our producers can win on their own. It's not a fight any industry which is at risk that climate change will fundamentally affect their bottom line, their business, can tackle on their own. We have had expert warnings, even a decade ago, just on the instance of these fires which have hit the industry, that these seasons would become longer and more intense, exacerbated by the forces of climate change.
The government's own official emissions data last month confirmed that Australia will not meet our Kyoto commitment to cut emissions by five per cent. We are clearly not doing enough. Industry is clearly looking to government to show leadership in this. Industry sees what's happening with climate change. They see the risks to their industry; they see the risks to production; they see the changing nature of production that climate change will have. This is so true for the wine industry, where grapes are completely dependent on climatic conditions. A change in the climate has a significant and direct impact on the wine industry and on our growers.
I do support these measures. I think they're practical and good steps. But if the government are serious about supporting our industry into the long term, beyond these measures, in addressing the serious challenges that are in front of the wine industry with respect to climate change, they need to do more. They need to join groups, old friends of theirs—BCA, BP, BHP, Telstra—and come onboard with net zero emissions by 2050. They need to come forward with a target, and then they need to develop a meaningful plan which will take on climate change. This is something business needs. It's something our wine industry needs. Our wine industry cannot fight this fight on their own. They need government. We need to be setting a strategic direction. Our wine industry and the wine we produce are high-value products. They are known worldwide and their quality is known worldwide. We need to protect this industry. We need to protect those products and we need to do everything we can to ensure that they can focus on fighting the fights they need to do. They need to focus on building their business and growing their business, and we need to take leadership on climate change. We need to take leadership on one of the biggest threats to their business going forward into the future.
Of course, as I have said throughout my speech, we also need to do so much more over the next few years to support this industry, especially in South Australia and especially in the Adelaide Hills, where the impact of the recent bushfires has been truly devastating. We need to support the industry there not just now, not just in the next few months, but in the years ahead, because for our wine industry that is when the impact is going to hit. That's the kind of lead time we're talking about in terms of the damage to their vines and their product getting out to market. We need to show them our support over the next few years. They need to see a plan from us for this. They need to see a plan long term on the critical issue of climate change, an issue which keeps them up at night in terms of how they're going to protect their businesses and products going forward. That is what they are looking for from us, so I am pleased to support this bill before us. I welcome it and I welcome the practical steps it's taking to support our wine industry, but let's not lose sight of the bigger picture and the bigger discussion we need to be having in this chamber on how to support our wine industry post the bushfire and on how we can support our wine industry by tackling the issue of climate change.
I rise this afternoon to speak briefly in support of the Wine Australia Amendment (Label Directory) Bill 2019, and I do so as a proud South Australian. I would argue that my home state of South Australia produces not only the best wine in the country but also, arguably, the best wine in the world—
in the spirit of bipartisanship with my colleagues, Senator Marielle Smith.
During the recent bushfires, the world watched as some of our best wine regions in the country were ravaged. They devastated some of our communities; however, it also brought out some of the best parts of our country and our communities, such as the spirit of mateship and a sense of community. The fires saw something in the order of 30 per cent, or around a third, of Adelaide Hills' production destroyed and more than 60 growers and producers in the Adelaide Hills impacted. The region lost something in the order of $20 million worth of wine, which in broad terms translates to approximately 794,000 cases. It will take years for these grapegrowers and winemakers to recover, and that's why it's important that we continue to support these local economies and communities upon which those businesses rely. However, it's pleasing to say that despite all of this adversity, South Australia is back open for business.
We need to help these winemakers and grapegrowers in every way possible. I'm a passionate advocate for supporting South Australian produce and, of course, Australian produce as well. The Morrison coalition government is backing business and continuing to assist our wine regions with this bill, which is designed to stop copycat wine producers from taking advantage. The bill will go some way to combatting that very immediate and very present threat.
Australia is, of course, a world leader in the production of premium agriculture products generally. We're renowned for producing premium-level food and wine in this country, which is highly sought after by consumers the world over. The Australian wine sector contributes something in the order of $40 billion annually to the Australian economy itself. There are 65 wine regions in Australia and approximately 2,500 wineries with around 6,000 grape growers making up those numbers. The Australian wine growing areas broadly stretch from southern Queensland to Tasmania and from the Margaret River in the west to my home state of South Australia, with, as I have just described, the Adelaide Hills and the wonderful McLaren Vale and Barossa Valley growing regions as well.
Worldwide demand for Australian wine created a boom in vineyard plantings in the 1990s and that boom just continued. The short-term outlook, at least, for the wine sector is positive. However, there is competition from larger wine producing countries all over the globe, and that will continue to place pressure on domestic producers in this country. The success of Australian wine exports depends partly, at least, on the maintenance of our internationally-recognised reputation for quality and integrity, and that is supported by Wine Australia's regulatory activities. The good name of our wine brands is particularly important for showcasing the range of wines we have on offer and that secondary process of building trust with the consumer. It's true to say that although we often equate the issues of piracy and forgery with other industries, such as the movie industry and sometimes the pharmaceutical industry, unfortunately the incidence of counterfeit Australian wine being sold around the world is a very real issue and it is seemingly on the rise. In fact, the discovery of 14,000 bottles of fake Penfolds wine, a great South Australian winery, for sale in China in November 2018 highlighted the extent and the trajectory of that problem. These items, apparently, were discovered online at severely reduced prices, and that seemingly triggered the awakening to this issue, partly.
So the existence of the counterfeit trade reduces confidence in the genuine Australian article, and that confidence translates into the industry itself. The industry has approached government and asked for stronger regulatory controls to attempt to deter the export of copycat wine from Australia. Those copycat wines, of course, are products which are exported from this country with labels that seek to mimic elements of the brands that they represent for their commercial gain. Therefore, they unfairly benefit from the reputation of those brands and the good reputation of the Australian wine producers who produce them.
So a label directory was proposed by the industry as a useful way to assist brand owners to protect their intellectual property rights and, by extension, the reputation of the wine itself. The bill will establish a label directory as part of Wine Australia's export controls as a deterrent to exporters of wine and other grape products who seek to unfairly benefit from the reputation of Australian brands. It will provide brand owners with the use of a searchable database of images of labels that can be used to find labels potentially infringing on the intellectual property rights of the grapegrowers and the wineries who rely upon them. It will also enable them to undertake civil action against copycat exporters through the Australian legal system. The amendments to this act will enable Wine Australia to impose additional requirements on wine exporters as a condition of approval to export grape products from Australia, and the requirements will be part of Wine Australia's grape product registration process. Failure to comply with that process will mean that grape products, including wine, can't be exported, but there will be no impacts for importers of wine into Australia, who are not in that orbit.
With the framing of the recent bushfires and the issues affecting some of the wineries in this country, this bill is another important step and is of tremendous importance to the integrity of, and continuing confidence in, the wine industry in this country, including in my home state. It adds one more string to Wine Australia's export bow, if you like, representing yet another mechanism which the industry can use to properly control the trade of counterfeit and copycat wines. As a senator for South Australia, the home of the finest wines in the country, I commend this bill to the Senate.
I rise to add my remarks on this bill, the Wine Australia Amendment (Label Directory) Bill 2019, and to those other senators who have made their contributions I think it's fair to say we probably beg to differ here about which state is the best state in producing wines, but it's fair to say Australia produces the best wines in the world and I think we can all have a unity ticket on that point.
As a senator for the great state of Victoria and as someone with Italian heritage, I'm sure it won't come as any surprise that I'm very passionate about viticulture here in our country. My home state is the very proud producer of just over 17 per cent of Australia's total output of wines. No state has more individual wine regions, wineries and diversity of wine varieties than Victoria. Without trying to claim the best wines in the country—although I would hate not to make the point that I do believe that Victoria does offer the best wines in Australia, but my colleagues on my side and those opposite will probably beg to differ—I say it is just really good to see the number of varieties that Australia, since Federation, has been able to produce. We have some of the best wines in the world, and the viticulture industry is certainly one that we should be very proud of. It employs quite a number of people across our nation. Whether it be pinot noir from the Mornington Peninsula or chardonnay from the Yarra Valley—
These are some of Senator Smith's favourite wines, as he's interjecting, but there are a number of Italian varieties that you will find in the King Valley as well, Senator Smith. There can be no doubt that Victoria is the premier wine-making state in Australia.
Senator Hanson-Young, I say that not just to brag about it but to point out how serious the wine industry is to those I represent—and no doubt to those you represent as well. We are talking about an $8 billion industry which employs around 13,000 in my state of Victoria. Those 13,000 workers work hard every day to ensure that the product is of the highest possible standard in order to allow them to compete in the $460 billion global market.
Whilst we in this place may not be of much help in the vineyard—with the obvious exception of Senator Farrell, who is obviously from South Australia, Senator Hanson-Young; he knows a few things about turning grapes into something special and of great value—there are some things that we can do to help. One thing we can do to help our wine producers is to protect the integrity of their brands. That is the purpose of the bill that we are debating today. It will enable Wine Australia to establish and maintain a publicly accessible directory of all Australian wine labels that are subject to export. This is a rather straightforward proposal. The directory will feature digital images of wine labels and information about the wine and the producer.
It is unfortunate that these measures have become necessary. Owing to the high quality and high value of Australian wines, we've seen in recent years a growing number of counterfeit Australian wines. A number of my colleagues in this place have obviously touched on that point. I will give one example. In November 2017 it was reported that Chinese authorities had seized around 14,000 bottles of wine purporting to be Penfolds. These bottles are very popular amongst many of my colleagues. The wines that were found by Chinese authorities were cheap, readily accessible and looked just like the real thing. Whilst there may have been wine in those bottles, or at least a red liquid of some description, not a drop of it actually came from Penfolds.
I don't want to elaborate at length on the risks that exist to Australian wine brands in a market like China, which itself accounts for almost $1 billion of our export wine value, but when the standards to ensure integrity aren't stringent it does have an impact on the industry as a whole. As we can all imagine, if you had bought one of the bottles of Penfolds that I mentioned earlier, thinking it was the genuine thing, and naturally found the product to be lacking in body and character, you'd be unlikely to buy a second one. With this new directory, wine producers who seek to copy the branding of well-known Australian brands for their own commercial gain will be more easily identified and sanctioned by the regulator. This could also involve the suspension or cancellation of their licences to export.
But there are yet more things we can do to support our nation's wine producers. As has been foreshadowed, Labor will be moving a second reading amendment to this bill to highlight the importance of taking meaningful action to combat climate change and secure the sustainability of Australian viticulture. We know that our climate is changing and we hear from all those involved in agriculture about the impact that this is having on their produce. The recent fires across eastern Australia and in my home state of Victoria have had a profound effect on wine-producing regions.
Labor certainly welcome the Wine Australia Amendment (Label Directory) Bill 2019 and the creation of this new directory. We welcome the opportunity to assist our nation's wine producers to safeguard the integrity of the product. It is great this afternoon to see us talking about the significance of the wine industry in Australia, the importance that it has to our economy and the number of job opportunities that it provides for many regions across Australia as well.
I want to finish by thanking everyone who's made a contribution, and I also want to make the point that it certainly is important that senators in this place stand up for an industry that employs quite a number of people and that has a value outside of Australia, globally. It is something that we should all be very proud of. People do identify with a number of Australian wines, especially those from many parts of our regions, and I'm very pleased that Victoria offers some of the best wines in this country.
I rise to speak on the Wine Australia Amendment (Label Directory) Bill 2019 and to follow on from other contributors. The Australian wine industry is one of our nation's great success stories. It's been built by pioneer families who recognised very early on that Australia's climate and terroir were building blocks for wine production of high quality. In my home state of Victoria, these pioneers include the Browns of Milawa, the Campbells and Morris families of Rutherglen and, more recently, Otto and Elena Dal Zotto in the King Valley, who make a fabulous Prosecco—and I hope we'll still be able to call it that post EU free trade agreement negotiations. These pioneering families have developed the industry and their household names and brands over many generations. This bill comes to the Senate designed to protect their blood, sweat and tears from unscrupulous operators who seek to cash in on their hard work.
Australia is the sixth-largest wine producer in the world and the fifth-largest wine exporter, with two-thirds of Australian wine exported, adding $2.89 billion to the economy annually. The continuing successes of Australian wine exports depend on the maintenance of our internationally recognised reputation for quality and integrity, which is supported by Wine Australia's regulatory activities. The Australian wine industry, represented by Australian Grape and Wine Incorporated, asked the government for stronger regulatory controls to deter the export of copycat wine from Australia. Copycat wine and other grape-product exports are products that are exported from Australia with labels that seek to mimic elements of Australian brands for commercial gain and to unfairly benefit from the reputation of those brands. A label directory was proposed by industry as a useful way to assist brand owners to protect their intellectual property rights and, by extension, the reputation of Australian wine.
Passage of the bill before the Senate today will enable a label directory to be established, as part of Australia's export controls, as a deterrent to exporters of wine and other grape products who seek to unfairly benefit from the reputation of Australian brands. The label directory will provide brand owners with a searchable database of images of labels, allowing them to find labels that potentially infringe their intellectual property rights and enabling them to undertake civil action against copycat exporters through the Australian legal system. The bill will also enable Wine Australia to use the label directory in administering licences to export wine under the Wine Australia Regulations 2018. For instance, Wine Australia can use the images of the labels submitted to it to confirm that wine exporters are complying their obligations under the Label Integrity Program, as set out in the act, or evidence of copycat labelling can be used in Wine Australia's ongoing assessment of whether a wine exporter can be considered a fit and proper person to hold a licence to export wine from Australia.
Public consultation on the proposal to develop the label directory was undertaken by the department of agriculture during September and October 2018, and the majority of submissions from the wine industry broadly supported the need and proposed model for the label directory. Following this consultation, the department further refined the proposal with Wine Australia and AGW. The Department of the Prime Minister and Cabinet and IP Australia were also consulted.
The amendments to the Wine Australia Act 2013 made by this bill will enable Wine Australia to impose additional requirements on exporters as a condition of approval to export grape products from Australia. This will support our internationally recognised wine industry to not just maintain the beautiful, high-quality product, which is on tables and in restaurants not just in Australia but around the world, but to underpin the significant regional tourism and job opportunities that are a result of our valuable viticulture industry. The bill will allow regulations to be made that would result in a requirement that digital colour images of labels be submitted and administered. There will be no impacts on importers of wine to Australia.
I hope the bill before us has the full support of the Australian Senate. It will underpin the integrity of our system of wine exports, and I think that's something everyone in this chamber can support.