NEW ZEALAND WINE FOOD BILL ORAL SUBMISSION OF NEW ZEALAND WINEGROWERS 23 SEPTEMBER Introduction

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1 NEW ZEALAND WINE PURE DISCOVERY FOOD BILL ORAL SUBMISSION OF NEW ZEALAND WINEGROWERS 23 SEPTEMBER 2010 Introduction 1. New Zealand Winegrowers (NZW) is the national industry organisation representing the interests of all grape growers and winemakers in New Zealand. NZW is generally supportive of the Food Bill. We note that the legislation governing the making and export of wine, the Wine Act 2003, is based on the same principles and has operated successfully for the wine industry for some years now. Our principal concern relates to the relationship between the Wine Act 2003 and the Food Bill. The Wine Act already provides a comprehensive regime for managing the food safety and suitability risks associated with the production and export of wine. While there is a partial exemption for businesses operating under a Wine Standards Management Plan (WSMP), this exemption does not fully account for the scope of the Wine Act and consequently there are significant overlaps and duplicate requirements. These overlaps will create confusion and cost, and will risk unravelling the highly functioning system already in place at considerable cost to both the wine sector and the Government. We also have specific concerns relating to two other matters: the interface between the Wine Act and the Food Bill in respect of producers who make wine and other foods on the same premises; the interface with the Sale of Liquor Act provisions on the sale of wine in supermarkets, and parity on labelling rules for imported products with regard to vintage, variety and ongm.

2 Relationship between the Wine Act and the Food Bill The Wine Act originated in the late 1990s with the wine sector's request to the Government for a more modern and effective regulatory structure for wine. The shortcomings of the old system, where wine was regulated by the Department of Health, had been shown up by a scandal involving mislabelled wine. NZFSA was created at around that time, establishing a new regulatory model for food. These two elements came together in the Wine Act The Wine Act was in some respects a "dry run" for the Food Bill. It covers the same subject matter, adopts the same risk management approach and uses essentially the same sorts of regulatory mechanisms. The main difference is that the Wine Act is far more refined and targeted specifically at the food safety and suitability issues arising out of the production and export of wine. That is the result of many years of consultation during the development of the Wine Act, its consideration by this Committee and in the subsequent three year implementation phase. We feel strongly about many of the points raised today because they have already been considered and resolved before this Committee. It is useful to explain the interaction between the Wine Act and the current Food Act In our view, this is the interface that should be maintained in the current Food Bill. Indeed, NZW has always been assured by NZFSA that the enactment of the Food Bill will not affect the operation of the Wine Act. We have not been consulted on the basis that a significant change to the Wine Act was being proposed. However, that will be the effect of the current version of the Food Bill. The Wine Act and the current Food Act 1981complement each other rather than overlapping. The Wine Act provides a comprehensive system for managing all hazards relating to the production of wine up to the point of sale, at which point the Food Act kicks in. The Food Act also provides a source of generic New Zealand food standards applying at the point of sale with which wine must comply, but that does not include standards relating to hazards in the production of wine. 10. The relevant objectives of the Wine Act are to: (a) provide for the setting of standards for identity, truthfulness wme: in labelling, and safety of

3 (b) provide for the minimising and management of risks to human health arising from the making of wine and the ensuring of compliance with wine standards: (c) facilitate the entry of wine into overseas markets by providing the controls and mechanisms needed to give and safeguard official assurances issued for the purpose of enabling entry into those markets: (d) enable the setting of export eligibility requirements Zealand wine in overseas markets: to safeguard the reputation of New 11. The Wine Act covers the production and export of all products defined as wine i.e.: grape wine, fruit wine, vegetable wine and mead, as well as wine products. NZW only represents producers of grape wine and the grapes used to make such wine. 12. The Wine Act operates in respect of all aspects of production up to the point of sale. It covers all food safety hazards as well as specific suitability requirements for wine (in particular compositional requirements) up to the point of sale in New Zealand. After that point, the Food Act 1981 comes into play. 13. It also sets out specific requirements that all grape wine exporters must meet as a condition of export, as well as rules for access to markets where NZFSA is asked to issue certificates. Wine must be fit for its intended purpose at the point of sale or export. 14. Under the Wine Act, wine businesses are obliged to comply with certain standards. These standards are comprised of both wine standards promulgated under the Wine Act and New Zealand food standards established under Part 2A of the Food Act 1981 (i.e. standards set under the Food Standards Code). However, wine is specifically exempted from the Food Hygiene Standards Compliance with these standards is managed through a Wine Standards Management Plan (WSMP) which is registered with NZFSA. This is the equivalent of a food control plan under the Food Bill. Every winery must operate under a WSMP, which is verified annually by a verifier approved by NZFSA. Wineries base their WSMPs on a code of practice which was developed by NZW in close cooperation with NZFSA. There is an exemption for micro wineries (i.e. wineries producing less than 10,000 cases per annum). 16. It is important to note that it is only the businesses actually involved in the making or bottling of wine that need to operate under a WSMP. There are other parties involved in the wine sector whose activities are covered in one way or another by obligations under the

4 Wine Act, specifically grape growers, transporters, storage facilities, labelling facilities, virtual wineries and wholesalers. However a policy decision was made during the creation of the Wine Act that the wine maker/bottler would be the point at which those obligations would be controlled, for the simple reason that this is the only point at which hazards in wine c_an effectively be controlled. After bottling, wine is sealed in inert, non resealable containers which render hazards a non issue. 17. Recognised persons and agencies, enforcement, offence and cost recovery are specifically provided under the sui generis Wine Act system. These were the subject of long debate at the Select Committee hearings for the Wine Act chaired by the current Agriculture Minister and consequently tailored to the specificities of the wine industry. All of these issues are also the subject of specific regulations and Director General notices under the Wine Act. 18. While there is no overlap between the current Food Act and the Wine Act, the Food Bill as it stands will create significant overlaps in the following areas: standard setting in respect of hazards which are already comprehensively dealt with by wine standards; food control plan obligations on growers, transporters, virtual wineries, storage facilities and wholesalers when hazards involving these parties are already regulated under the Wine Act and managed through WSMPs; new provisions regarding recognised agencies and persons, enforcement, offences and cost recovery that are already covered by the Wine Act and subject to specific regulations and DG notices under the Wine Act. 19. We submit that the status quo should be maintained between the Wine Act and the Food Bill. That means: the Food Bill should be a source of generic New Zealand food standards applying at the point of sale in respect of wine; standards relating to hazards, truthfulness in labelling and export of wine should continue to be made under the Wine Act only; compliance with both wine standards and New Zealand food standards up to the point of sale should continue to be managed through WSMPs and the broader the Wine Act regime, including recognised persons and agencies, enforcement, and cost recovery; compliance with the Food Bill would be required at or beyond the point of sale. offences 4

5 Wine and food on the same premises 20. The Food Bill has rightly proposed an amendment to allow those wine producers who also make "food" products such as grape juice or vinegar using the same raw materials in the same premises to operate under a WSMP rather than having to work under an FCP. We request that this allowance be extended to the micro wineries of less than 10,000 litres per annum that are currently entitled to an exemption from the requirement to register their WSMP. There would appear to be little or no increased risk, since such producers will remain obliged to operate under WSMP regulations and subject to the Wine Act compliance regime (it is only the registration and verification requirements that they are exempted from). Such producers are the ones who would be most susceptible to the additional compliance costs of an FCP. 21. Our second concern about dual wine and food businesses is that there appears to be a lack of clarity regarding whether such producers can choose to combine their activities under a food control plan in order to avoid dual compliance and verification costs. Our view is that this choice should be available to dual food and wine businesses, including those that wish to export, provided that adequate conditions are imposed to ensure that wine made under this regime was subject to the same standards as that made under the Wine Act regime. Sale of Liquor Act 22. The Food Bill appears to introduce a new definition for "wine" and inconsistent terminology regarding sparkling wine, fruit wine, vegetable wine and mead. While consequential changes are necessary to update the Sale of Liquor Act, we do not believe that these should alter the existing permissions for the sale of wine in supermarket particularly as sale of liquor issues are generally subject to a conscience vote. Consequently, we request that the consequential amendments to the Sale of Liquor Act be aligned with definitions on the Wine Act and Food Standards Code. Minimum content standards for imported wines 23. Our last, but by no means least important, submission relates to labelling standards for imported wines. As a consequence of the repeal of the Food Act 1981, the Food Safety Regulations 2002 will be repealed, taking with them the existing rules establishing the minimum content of wine from a given vintage, variety or origin that is required if one of those claims is used on a wine label of imported wine sold in New Zealand. We believe that it is very important that imported wine sold in New Zealand is subject to the same labelling

6 standards as domestic wine. Otherwise there is scope for consumer deception and unfair competition. 24. The existing standard for imported wines (75% minimum content) is inconsistent with the standard that applies to New Zealand wine (85% minimum content, conjunctively applied). During the development of the Wine Act process, we had requested that the NZ and imported wine standards be aligned. This was not possible at the time because imported wines are outside the scope of the Wine Act. However, we believe that the regulations applying to imported wines should now be updated to be brought into alignment with local wines. This could be achieved through a specific regulation making power under the Food Bill. John Barker General Counsel New Zealand Winegrowers 6

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