Excise Remission: The Opportunity New Zealand Is Missing

If you've never heard of excise tax, you're probably not alone.

Most people don't think about it while they're trying to pay the mortgage, buy groceries or fill the car with petrol. Most of us are more concerned about making ends meet than understanding how alcohol is taxed, and that's completely fair.

But every now and then it's worth explaining why what seems like a niche tax issue has a much bigger impact than most people realise.

One of the questions we're often asked is why New Zealand's small distilleries keep talking about excise remission. Some people assume it's simply about wanting to pay less excise.

For us, it's not about the excise itself. It's about what never happens because that money is no longer available. The apprentice who isn't hired. The export order that has to wait. The new tour experience that isn't built. The local supplier who misses out on another order.

Every dollar that leaves a growing business before it has the chance to be reinvested represents a missed opportunity. It could have helped employ another person, purchase more from a New Zealand supplier, improve production, develop a new export market or bring more visitors into the local community.

That is the real cost of the current system. It is not simply money leaving a distillery. It is potential jobs, wages, investment and growth leaving with it.

Imagine you're running a small manufacturing business. Orders are starting to pick up, you've got customers asking for more product and, for the first time in a while, you're thinking, "Maybe it's time to hire another person."

That extra pair of hands could mean producing more bottles, spending more time finding export customers or giving visitors a better experience when they walk through your doors. It might even be the difference between saying "yes" to a new opportunity instead of "maybe next year."

But that's exactly where the current system can hold businesses back. Before that money has the chance to become another wage, another export order or another investment, a significant portion has already left the business.

The frustrating part is that we're not just competing against bigger businesses, we're competing against companies that have often been helped to grow overseas through significant government support, incentives and industry investment. At the same time, many of those multinational companies return a large share of their profits to overseas parent companies and shareholders.

Every bottle made by a locally owned New Zealand distillery has the potential to keep money circulating here at home. It helps create local jobs, supports local suppliers, pays local wages and encourages more investment in our own communities. That's money that keeps working in New Zealand instead of leaving our shores.

Countries like Australia have recognised the economic value of local distilling and introduced excise remissions that allow smaller producers to reinvest and grow. Scotland has spent decades building whisky into one of its largest manufacturing and tourism industries, supporting more than 41,000 jobs and attracting around 2.7 million distillery visits every year. Those visitors don't just buy a bottle, they stay in accommodation, eat in restaurants, visit local attractions and spend money throughout surrounding communities. That's because those governments see distilling for what it really is: manufacturing, tourism, exports and regional economic development, not simply alcohol production.

Victoria is following a similar path. Independent economic analysis has highlighted the contribution that craft distilleries make to regional economies through manufacturing, tourism, agriculture and skilled employment. Rather than treating distilleries as simply another taxpayer, they are increasingly recognised as businesses that attract visitors, support local supply chains and create long-term economic value.

When small New Zealand distillery’s grow, we're not the only ones who benefit. We buy more bottles, more labels and more ingredients. We use more freight, more local trades and more services. We welcome more visitors through our doors, and many of those people don't stop with us, they'll grab lunch nearby, visit another attraction or spend the weekend exploring Auckland.

That's why we keep talking about excise remission. It isn't because we want cheaper spirits or to avoid paying our fair share of tax. It's because we'd rather see more of that money working here first, creating jobs, backing local suppliers and helping New Zealand businesses grow.

Every successful manufacturer started out small. At some point they took a chance on hiring their first employee, buying their first piece of equipment or chasing their first export customer. Those decisions take confidence, but they also take cash. If businesses can't afford to invest, those opportunities simply don't happen.

New Zealand talks a lot about building an economy based on innovation, exports and higher-value manufacturing. We all want better-paying jobs, stronger regional economies and more businesses selling New Zealand products to the world. Excise remission is one practical way to help make that happen. It allows growing manufacturers to reinvest in people, equipment and expansion before those opportunities are lost.

The biggest cost of the current system isn't the tax (excise) itself, it's the opportunities we never get to see. The apprentice who doesn't get offered a job. The export customer who ends up buying from overseas instead. The tourism experience that never opens its doors. The local supplier who misses out on another order.

We're not suggesting distilleries shouldn't pay tax. Like every business, we have a responsibility to contribute. The question is whether allowing growing New Zealand manufacturers to invest first could create a stronger economy for everyone.

Because when local businesses succeed, everyone benefits. More people are employed. More money flows through local communities. More visitors discover what New Zealand has to offer. More Kiwi-made products reach overseas markets. And more families have the opportunity to build a future right here at home.

Maybe that's the real conversation we should be having. If an excise remission was in place, what opportunities could it create for New Zealand? How many more people could be employed? How many more visitors could our distilleries attract? How many more export markets could Kiwi businesses reach?

Those are the questions worth asking, because when New Zealand manufacturers have the confidence to invest, the benefits extend far beyond the distillery gates.