Microbrewers and distillers shut out of cellar door law change

Microbreweries and distillers of high-end spirits want to be included in a proposed law to boost wine tourism, but are unlikely to see their hopes fulfilled.

National MP Stuart Smith’s, dubbed the “minister of wine”, has wide political support for his Sale and Supply of Alcohol (Cellar Door Tasting) private members’ bill to allow smaller vineyards that do not have an on-licence to charge for tastings.

Wine is New Zealand’s sixth-largest export, and vineyard tourism is playing a part in rebuilding tourism, the Kaikōura MP said. But unnecessary red tape was holding back smaller wineries which did not have the resources to establish the cafes and restaurants they would need to qualify for an on-licence to charge money for tastings.

Smith’s bill would let vineyards that only had off-licences to charge for tastings, provided the customer bought the wine and took it away with them.

But microbrewers and distillers of highend liquor like gin, said they would also like to be able to charge for tastings, which would help their profitability, and recognise they were also playing their part in providing experiences to tourists.

Adrian Rumney, co-owner of Papaiti Gin in Upokongaro near Whanganui, said: “We just want a level playing field.”

Rumney’s range of gins sell for $89 a bottle, and like wine tastings at vineyards, there was little risk of harm from letting distillers like him charge for tastings because his gins were not the choice of people seeking to get drunk.

“The people through our door are a completely different demographic than those who go to the corner liquor store,” he said.

Papaiti did do tastings, but could not charge for them, he said.

“Over time, that’s quite a big cost,” he said.

However, Smith said he did not want to risk support for his bill by adding distillers and microbreweries.

“My member’s bill received overwhelming support at first reading last year with 109 out of 120 votes in favour,” he said. “It was treated as a conscience matter by some parties. I lobbied members across the House pointing out that the bill will help small businesses and help grow regional tourism.”

Alcohol harm advocates, including Alcohol Health Watch, opposed microbreweries and distilleries from being included in the bill.

Wine-makers like Johanneshof Cellars in Koromiko in Marlborough, and Johner Estates in the Wairarapa, said they gave away substantial amounts of wine in tastings because they could not afford the facilities needed to get on-licences.

Karl Johner from Johner Estates told MPs: “We have an off-licence only in order to provide tastings of our wine and some wines are in the $50 to $60 price range for the Reserve wines.

Customers often tried an average of eight wines, and might only buy one or two bottles, if any.

The general policy statement for Smith’s bill also suggests making the change he wants to see would remove an awkwardness around free tastings.

“This devalues the premium nature of the product, reduces winery cellar door profitability, makes visitors feel awkward or obliged to make a purchase to recognise the value they are receiving,” the bill says.

Edel Everling and Warwick Foley from Johanneshof Cellars said: “We feel the current liquor licensing laws have not only held us back from thriving, but instead penalise us by charging us several times, by way of licence fees as well as excise duty ($2.66 per bottle) and not being able to recoup the value of the wine tastings.

“Would we be allowed to charge for the

value of the wine poured in free tastings per year, it would allow us to employ one part time cellar door host on a permanent basis. Instead, we are forced to cover this by our family members,” the winery said.

Large-scale wine producer Lion NZ threw its weight behind Smith’s bill, but called for brewers and distillers to be added.

It said its Wither Hills winery in Marlborough was an important destination for tourists, giving it first-hand experience of the importance of tastings for wineries.

But, Lion said: “It is a costly exercise because it requires a dedicated tasting room, staffing it, and providing the wine that is poured. This expense can be difficult to justify if visitors do not pay for tastings, or purchase any products.”

“Lion is equally aware that brewery tasting rooms are an integral part of the tourism and hospitality offer in the regions where they are located.”

Melanie Kees, executive director of the Brewers Guild, which counted 80 breweries as members, said there were over 200 breweries across the country, many of which were micro or small size businesses.

“Beer tourism is a market that is growing around the world, and with Asia one of the fastest growing craft beer markets in the world, the opportunity to grow beer tourism in NZ needs to start with recognising ‘tap rooms’ or ‘brewery cellars’ as modern tourism experiences,” Kees said.

Tasting rooms allowed breweries to tell their own unique stories, she said, but others could not afford to give their beer away.

“As it currently stands micro and small breweries have to give product away, and dispose of opened and unused product, both of which have negative impacts on small businesses, who cannot justify nor afford to meet the requirements of an on-licence application,” Kees said.

“Just like wine, craft beer can develop a world-class reputation from small beginnings, which is why we are asking that the Cellar Door bill is extended to include breweries who have off-licences.”

But while the opportunity for brewery and distillery tasting rooms is now not recognised in the bill, the scale of the opportunity for growing wine tourism for some regions has been outlined in some submissions on the bill.

The board of the Central Otago Winegrowers Association said its sector was dominated by small family-owned producers.

“In 2022 there were 235 vineyards in Central Otago with 74% having a planted area of less than 10 hectares. Of the 90 wine producer members in Central Otago Winegrowers Association in 2023, 89 were classified as small/medium businesses. There are 57 cellar doors operated within Central Otago.

“Most small wine producers have a dependency on the sale of wines at retail price through cellar door facilities to have business viability*,” it said.

SUPPLIED Adrian Rumney, co-owner of Papaiti Gin in Upokongaro near Whanganui, said: “We just want a level playing field.”