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Thursday, 28 October 1993
Page: 2826

Senator McMULLAN (Minister for the Arts and Administrative Services) (9.51 p.m.) —I move:

  That this bill be now read a second time.

I seek leave to have the second reading speech incorporated in Hansard.

  Leave granted.

  The speech read as follows

  The purpose of this bill is to implement the EC/Australia Wine Agreement.

On 6 December 1992, I jointly announced with our wine industry that Australian and European Commission officials had negotiated the text of a bilateral wine agreement aimed at improving our bilateral wine trade. This announcement attracted wide media attention, rightly so, as the European Community is Australia's largest export market for wine. During 1992/93, Australian winemakers exported 44m litres worth $144m to the EC, or almost half of our total exports of $293m. This Agreement will guarantee our continued access to the EC market which will remain the key market as our wine industry strives to lift exports to $1 billion by the year 2000.

This legislation enables the Agreement to enter into force and our winemakers to enjoy its benefits.

The Agreement provides for the mutual recognition of each Party's winemaking practices and standards; it affords mutual protection to each Party's geographical indications, that is, the names of our wine regions such as Coonawarra and Hunter Valley; it reduces the number of analyses the EC requires of Australian wines from 8 to 3; it allows Australian winemakers to market wines in the EC labelled with multi-varietal and multi-regional blends; and it allows the export of Australian sweet wines such as the justly famous De Bortoli "Noble One" to the European Community—previously not permitted. Importantly, it prevents either party from introducing additional certification requirements on imports of each other's wines.

The Agreement recognises the importance of European geographical indications to the European Community. It also recognises the widespread use of EC names on Australian wines. The Agreement provides for the gradual phase-out of our use of EC geographical indications according to their commercial importance.

There are four tranches of EC names to be protected. A list of thousands of EC geographical names which are of no commercial significance to us will be protected immediately the Agreement enters into force. The second tranche is of little used names such as `Frascati' and `White Bordeaux'; these will be phased-out on the 31 December this year. A further group of names of some importance to us such as `Chianti` and `Madeira' must be phased-out by 31 December 1997. The last tranche includes names which are widely used by our winemakers, names like `Claret', `Chablis', `Burgundy' and `Champagne'. Phase-out periods for these names have yet to be determined but the Agreement provides that negotiations on phase-out dates for these names must be concluded by 31 December 1997.

We have used European geographical names to denote a style of wine for more than a hundred years. Migrants often brought these names to Australia and used them to describe a familiar style of wine; the names have become generic. Names like `champagne` have been used to describe a dry sparkling wine. Once protection commences, both European and Australian geographical indications will only be used to indicate the true place of origin of the wine. Thus the name `champagne' will only be used to describe wine made in the `Champagne' region of France.

The Agreement provides for additional phase-out periods to clear stock from wholesalers and retailers. Australian wine made prior to the phase-out period for production labelled with the protected EC names may be marketed by wholesalers for up to three years and by retailers until stocks are exhausted.

Australian winemakers have already begun using varietal and brand names to replace European geographical indications.

The bill also provides for the protection of traditional wine expressions. Words such as "brut" or "reserve" are frequently used to indicate a certain quality or style of wine. Under the bill, traditional expressions may only be used to describe wine which originates in the country in which the expression has been traditionally and consistently used. The lists of both Australian and EC traditional expressions are still under negotiation by the two parties to the Agreement. The bill provides for protection to commence when the traditional expressions are entered in a register. This will occur after negotiations on protection of traditional names are concluded.

The Agreement has the strong support of the peak wine industry body, the Winemakers' Federation of Australia. Wine industry representatives were fully involved in the negotiations on the Agreement from the outset. The Agreement has strong support throughout the European Community.

The bill establishes a Geographical Indications Committee to determine the boundaries of Australian geographical indications. EC regulations require that where wine exported to the EC is labelled with a geographical indication, the boundaries of that region must be defined precisely.

Where does Coonawarra end and Riverland start? This question is just as relevant for Australian wine consumers. By defining the boundaries of our geographical indications, this bill will give greater certainty to enforcement of the Label Integrity Program provisions of the Act, which require winemakers to keep records to substantiate label claims of the vintage, variety or geographical indication of wine. The bill will give consumers the guarantee that when wine is labelled "Coonawarra", the grapes from which the wine was made came from within the defined boundaries of the Coonawarra region.

The Geographical Indications Committee will comprise a Winemakers' Federation of Australia nominee, a nominee of the Wine Grape Growers' Council of Australia and an Australian Wine and Brandy Corporation (AWBC) nominee. The Committee will publish proposed determinations and seek submissions from winemakers and grapegrowers and their organisations on the boundaries of Australian wine regions. There will be appeal rights to the Administrative Appeals Tribunal and the Federal Court.

The bill establishes a Registrar of geographical indications and traditional expressions who will be an employee of the Australian Wine and Brandy Corporation. The Registrar will list all geographical indications determined by the Committee, list the protected EC names and inform other countries of Australia's protected names.

The Winemakers' Federation of Australia has applied to the National Food Authority to have the Australian Food Standards Code covering wine modernised and brought more closely into line with EC standards. The NFA application, even if accepted in its entirety, will not authorise all EC winemaking practices. There are some EC standards which the Australian wine industry does not want to adopt for wine made in Australia. The bill authorises the import of wine from the EC which conforms with the compositional requirements set down in the Agreement and allows these standards to be varied from time to time by agreement as EC winemaking practises change. The EC practices differ in minor ways and in ways which do not affect health, from the standards set by the National Food Authority for sale of Australian and imported wine. EC wine will still have to comply in all other respects with Australian standards, for example with regard to labelling with alcoholic content.

The EC/Australia Wine Agreement is the first of several agreements on wine we intend to conclude with our major wine trading partners. Work is already underway on developing a wine agreement with New Zealand. The bill therefore amends the objects of the Act to include implementing the EC/Australia Wine Agreement; enabling Australia to implement further international agreements relating to trade in wine; and defining Australian geographical indications for wine. It extends the powers and functions of the AWBC to cover administration of the EC/Australia Wine Agreement and the definition of Australian geographical indications.

The bill creates several new offences. The offences include the false or misleading use of geographical indications and traditional expressions for wine. However, winemakers will continue to be able to use their individual name and the individual name of their predecessor in business, in the course of trade, even where that name is the same as the name of a protected geographical indication.

The bill also amends the Act to allow regulations to be made concerning blending rules for wine and the composition of export wine. These Regulations will not be activated until there has been further consultations with the wine industry, the Australian Wine and Brandy Corporation and the National Food Authority. The bill also allows the Australian Wine and Brandy Corporation to prescribe the grape varieties which may be used in making wine. This will prevent the use of hybrid grape varieties in export wine, which is a concern in some export markets.

The bill will have no financial impact.

This bill and the Agreement it seeks to implement, presents challenges for our wine industry including the opportunity to consolidate our position in the world market. It represents a landmark commitment by our industry and a true sign that our industry has come of age internationally. It removes technical trade barriers to our wines on EC markets. More importantly, it provides the important basis for continued future access to this market!

I commend the bill to honourable senators and present the Explanatory Memorandum to this Bill.

  Debate (on motion by Senator Reid) adjourned.