The Australian Distillers Association President, Holly Klintworth, recently addressed the Spirits Victoria Association conference with an update on the Association's activities and strategy, covering the following topics...
Campaign for Fair and Sustainable Tax Reform is our number one issue. I am sure you would have seen extensive media reporting of this recently. Even if you do not pay it now, many in your industry are. I am sure for many of you, it may be in your business plan to scale to the size that you will be paying it.
If it is not something you think about today, you may be paying it in the future because of two things.
Firstly, the $350K remission is not legislated. It can be taken away at any time. We need to maintain the pressure on the Government to continue to provide our industry, along with beer and wine producers, the modest relief to encourage investment.
Secondly, the current rate of $350K is fixed, and excise increases twice per year. Since the $350K remission was introduced, the excise rate has already increased 4 times, resulting in a reduction of capacity to produce under the threshold. In the last 18 months alone, the maximum amount of production you can make under the threshold has been reduced by more than ten percent. With the magic of compound interest, because we are at a much higher rate than beer, the impact on our industry is disproportionate. With every increase -twice per year- your productivity frontier decreases. So, even if you are not paying it now, you may very well be in the near future.
We will continue to campaign for fair and sustainable tax reform. We accept that we pay a sumptuary tax, but sure $100 / LAL is enough. When is enough, enough? Where does it stop?
That is why we produced the members handbook to give you the tools you need to engage with your local politicians and media to assist in the campaign. Our powerful advocacy in Canberra is effective, but we all know the adage – all politics is local.
If you have not already, go to our website and download it from the home page.
We need you to be part of the campaign. Write a letter to your MP, using your own words (the handbook can help you get started) and explain to your local MP that the tax policy that was set 40 years ago, when there were only two companies in Australia paying that (Bundaberg and Beenleigh) is out of date.
We now have more than 600 distillers caught up in this out of date and unfair tax. The handbook also has talking points and some creative infographics. As the map showed, two thirds of distilleries, like my own, are in rural and regional areas.
We are domestic manufacturing jobs – something the Government says they want to encourage- and we are tourism jobs. We use Australian products to create our wonderful products and we should not be punished by lazy, out of date policy settings.
We know the policy settings are more than just tax. We think the Australian Spirits Industry can be like the Australian Wine Industry.
More than 30 years ago the Federal Government worked with the wine industry to develop an industry roadmap that identified a successful pathway for sustainable growth and export development. Australian Spirits Industry can and should do the same.
The key areas we have identified for a framework for growth are:
We are campaigning for a Federal Parliamentary Inquiry into the Australian Spirits Industry. We want to partner with the Government on the development of this framework.
To prepare for this, we will be creating special purpose working groups to ensure we have good representation across the spirits industry to capture the views, ideas and aspirations of the category. These will be member driven and coordinated by us.
These working groups are different to our Policy Project Groups.
These Project Groups are chaired by a Member of the ADA Board and meet on an ad hoc basis and when required. The Project Groups are a reference and guidance point for the broader industry. They are advisory only. Any conclusions made by the project groups will be required to form recommendations that will go to the ADA Board for endorsement or approval.
The Project Groups are driven by the Members who participate and secretariat and organisational assistance is provided by the ADA.
We currently have three Project Groups
We sought expressions of interest from any Member of the ADA who is interested in joining any of the Project Groups. The Technical Standards Project Group is now quite large and will more than likely be breaking into sub groups for their product description process.
We continue our engagement with the Parliamentary Friends of Australian Spirits and we will be having another event with them later this year. It is powerful when our local MPs have an event and engage with our distilleries in their electorate, it is equally important that we engage with them at their “house”. That is why we will continue our annual event of hosting spirits manufacturers and producers in Parliament House, Canberra.
You can see we are working hard to ensure our engagement with members and stakeholders is meaningful and relevant. To help us do this better, we are conducting a review of our governance arrangements. Next year the Association will celebrate our 20-year anniversary. When our constitution was written 20 years ago, there were only half a dozen members. We now have nearly 500 members and we have active state organisations.
That is why we are currently in the process of reviewing our constitution and our arrangements with the state organisations.
We anticipate having a new constitution later this year, that we will put to members for your consideration. If adopted, it will allow for a more representative and accountable organisation.
We are planning to allow the state organisation, if they choose to partner, to nominate two representatives to the National Board. Where a state organisation does not want to partner, we will elect two delegates from that state.
For any of you that have attended the Annual Conference or attended the AGM on line, this will not be anything new. We have been talking about this framework for more than a year, but we want to make sure we get it right.
Some state organisations have already partnered with the ADA to allow for smoother membership experience. This model is optional and does not take away from the incredibly critical role the state organisation runs.
We are expanding the services we provide to members. If you haven’t done so already, I encourage you to update your details on the member portal. This will allow you and all of your staff to access the member benefits and latest information.
The portal includes:
We are continuing to update the members portal with useful information and services.
Another exciting development is the recent launch of the National Distilling Institute.
This will become your one stop shop for all your industry training needs.
At last conference we announced that we would be providing a certificate III and Certificate IV in Distilling. Since the launch, we have varied the program and slightly delayed the launch. After significant feedback from the industry, it has been agreed that the Certificate IV in Artisan Products (Distilling) is a much better fit for purpose for the craft distilling industry.
That is why we are currently developing the modules and training our teachers so you will have the best available and industry relevant training that you will be able to do in your workplace. The Certificate IV will be made available by the end of the year.
We are also developing some short courses, or micro-credentials. The first micro credentials will be focussed around safety. In time, there will be a suite of micro-credentials you will have access to. Some will be free and self-paced, others will have a modest fee, depending on the development costs and costs of delivery.
We will also curate the best in class third party training providers that allow for some control and consistency across the industry.
When these are launched, you will certainly hear more about these exciting programs.
One of the most exciting and important agenda items on the ADA calendar is the Annual Conference. Like this conference, we all know the benefits of making the investment and getting away from your distillery to meet with peers and focus on some professional development.
The 2024 Annual Conference will be held in Brisbane in April next year. We will continue the new practice of having a trade show so you can meet with suppliers and service providers.
This will also have a number of master classes and professional updates. We will have the conference and our formal dinner where we will induct someone to the Hall of Fame who have gone above and beyond in the service to our industry.
We will also be having some distillery tours for those that want to have insights into the way some of our colleagues run their distillery and operations. The 2024 Conference will be our biggest and most informative ever.
Finally, I would like to thank all of the members who have been members of the Australian Distillers Association. We are part of an exciting and growing industry. We are only strong when we are united.
If you are not a member, I encourage you to join today.
If you know of any new members in your area, please reach out to them and encourage them to join.
Thank you for allowing me to address your conference and I look forward to saying hello to anyone I have not yet met.
Australian Distillers Association
Suite 1601, 447 Kent Street, Sydney, NSW, 2000
ABN 77 622 845 275