Wine equalisation tax is currently set at 29 per cent, and is calculated on the wholesale price of wine. 

For retail sales, the wholesale price is deemed to be half of the retail price. For example if a winemaker sells a bottles of wine at a cellar door for $40, they would have to pay 29 per cent tax on $20, which equals $5.80.

Rebates are currently offered to wine producers on taxes paid, capped at $500,000.

However, the government announced as part of the budget that from 2019 winemakers must own an interest in a winery to be able to claim the rebate.

Mr Gartelmann said he does not fit this criteria as he is a wine producer, which means he buys grapes and has the wine made by another company.

He said the change will mean he has to increase the price of his wine to cover the tax, which could result in less sales and could have a flow-on effect to grape growers, wine makers and alike.

“We make some wine for a wine society, where the profit margin is very low,” he said. 

“If we cannot claim the rebate, at current prices we would be making a loss.

“If we increase our price, and the next door winery does not because it can claim the rebate, we lose all that business too.”

The changes are set to come into effect in 2019, but Mr Gartelmann hopes they will be reviewed before then.

Jorg Gartelmann of Gartelmann Wines is calling on the government to bring forward changes that will prevent big wine companies from claiming tax rebates.

The wine equalisation tax was introduced to assist smaller winemakers, by setting a $500,000 rebate cap.

However, large companies have avoided the cap by splitting profits into associated businesses.

The government announced that the cap will be reduced from $500,000 to $350,000 on July 1, 2017 and to $290,000 on July 1, 2018. From July 2019, wine producers must own an interest in a winery and sell packaged, branded wine domestically to claim the rebate.

However Mr Gartelmann wants to see the changes implemented sooner.

“Why close the loophole in 2019, why not close it now?” He said.

Hunter Valley Wine and Tourism Association chairman George Souris agreed saying larger companies will “have a free run until then.”

“I’ve requested that the minister consider that these 2019 measures be brought forward,” he said.

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