Wine Equalisation Tax reforms increase value of many registered Australian trade marks


Owning a registered trade mark conveys many benefits for any business – the exclusive right to use a brand, legal protection against imitation, and an intangible asset for licencing or sale among others.

However, a recent announcement by the Australian government will confer a new benefit on holders of one class of Australian trade marks – an exclusive tax rebate.

The Wine Equalisation Tax

The Wine Equalisation Tax rebate is a measure enforced by the Australian Government to support local wine makers in regional Australia. A tax of 29% is imposed on wholesale wine sales in Australia, but up until now, all ‘producers’ of wine have been eligible for a rebate.

Designed to support local producers on a comparatively small scale, the rebate had been widely exploited by large industrial manufacturers of unbranded ‘cleanskin’ and cask wines. Purchasing their grapes from vinyards and sometimes claiming multiple rebates at different stages of the production of the same wine, some of these large scale manufacturers of unbranded products have been the beneficiaries of millions of dollars of rebates.

The new rules

Last month, the Turnbull government announced a number of changes to close these WET loopholes.

Some of these changes relate to ownership – producers must now own 85% of the grapes used to make the wine, and own the grapes and the product throughout the winemaking process. There are also new restrictions on the size of the containers in which the wine is sold.

Perhaps the most important new requirement for safe-guarding local wine producers is that the sale must be of wine in containers which are branded with a trade mark which has been properly registered with IP Australia (unless the producer is legally unable to register it).

Implications for trade mark owners

For wine producers this change in legislation will make it imperative to ensure that they have registered the trade mark under which they sell their wine. We highly recommend undertaking this process with the support of a Registered Trade Marks Attorney – a directory of these is available through IPTA – the Institute of Patent & Trade Marks Attorneys of Australia.

In addition, it will mean an increase in asset value for those wine producers who do hold a registered trade mark. Wine producing businesses which meet the other criteria, and have such a registered trade mark, will be entitled to a substantial tax rebate which is not available to other wine producers, adding important extra value to their businesses.

Finally, for businesses in related sectors, where government support is extended to encourage high-quality local production, this amendment constitutes an interesting precedent. At a time when the importance and prevalence of producer branding is growing across many primary industries, the selling of goods under a registered Australian trade mark may suggest itself as a helpful part of a suite of tests for government support in other sectors.

Back to Articles

Contact our Expert Team

Contact Us