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2008-2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
AUSTRALIAN WINE AND BRANDY CORPORATION AMENDMENT BILL 2009
EXPLANATORY MEMORANDUM
(Circulated by Authority of the Minister for Agriculture, Fisheries and
Forestry, the Hon. Tony Burke MP)
AUSTRALIAN WINE AND BRANDY CORPORATION AMENDMENT BILL 2009
GENERAL OUTLINE
The purpose of the first schedule of amendments contained in this bill is
to make the necessary amendments to Australian legislation for Australia to
bring the Australia - European Community (EC) Agreement on Trade in Wine
(the agreement) into force. The schedule amends the Australian Wine and
Brandy Corporation Act 1980 (AWBC Act) and Trade Marks Act 1995 (Trade
Marks Act).
The agreement was signed by the Australian Government and the European
Community on 1 December 2009. It is a significant revision of the 1994
Australia - European Community Agreement on Trade in Wine. It provides
benefits to both parties and is strongly supported by the Australian wine
industry.
The amendments provide rules for the protection of foreign country
geographical indications (GIs), translations of foreign country GIs,
traditional expressions (TEs), Australian quality wine terms and other
additional terms. Significantly, the amendments provide a determination
process for foreign country GIs and translations of GIs. To provide for
these changes the objects of the AWBC Act and the powers of the Australian
Wine and Brandy Corporation (AWBC) are amended.
The amendments also resolve issues around the meaning of false and
misleading practices in relation to GIs, traditional expressions and
protected terms, including providing exceptions from the false and
misleading provisions relating to the sale, export or import of wine, as
they relate to GIs, for common English words.
The amendments replace the previous Register of Protected Names with a new
Register of Protected Geographical Indications and Other Terms.
Amendments to the Trade Marks Act are necessary to implement the agreement
and to ensure that its interpretation is consistent with that of the AWBC
Act. Common definitions relevant to the agreement will be amended and
provision will be made for the Registrar of Trade Marks to be able to amend
the representation of a trade mark or an application to register a trade
mark. The amendments will also make it clear that trade marks that include
a common English word that coincides with a geographical indication can be
registered.
The purpose of the second schedule of amendments to the AWBC Act is to
further protect Australia's reputation for the production of wines of
quality and integrity. This will be achieved by strengthening the AWBC's
Label Integrity Program (LIP).
The LIP was established to ensure truth in labelling, thereby increasing
consumer confidence in the reliability of label claims. The LIP is
currently limited to wine manufacturers and does not cover other
participants in the wine supply chain, such as wineries that do not make
wine but merely perform a limited range of grape juice processing
procedures, agents, growers, wholesalers and retailers. These people play a
fundamental role in the supply chain.
The amendments will provide that those involved in the production,
distribution and sale of wine and grapes used to make wine must keep a
record of the date of receipt, quantity, vintage, variety, GI and the
identity of the supplier (or recipient) of those goods. A new offence will
be created to apply to a person who makes a claim relating to vintage,
variety or GI of wine goods when that claim is not supported by their
records.
The purpose of the third schedule is to correct a number of weaknesses with
the compliance provisions of the AWBC Act that have been identified by the
AWBC. The changes to the compliance provisions will strengthen the AWBC's
ability to stop a person from engaging in action that may be contrary to
the AWBC Act and enable the AWBC to pass on information obtained under the
AWBC Act to others who may have a role in enforcing laws relating to wine
and health.
The amendments also align the penalties in the AWBC Act with government
policy regarding offence provisions and the use of penalty units as a
replacement for fixed dollar amounts.
FINANCIAL IMPACT STATEMENT
There are no financial implications for the Commonwealth as a result of the
bill.
REGULATION IMPACT STATEMENT
The following regulation impact statement has been prepared for the
amendments to the LIP. A regulation impact statement was prepared for the
wine agreement. It is available at the Australian Treaties Library on the
AustLII Database at http://www.austlii.edu.au/au/other/dfat/.
REGULATION IMPACT STATEMENT 7634
AMENDMENT OF THE AUSTRALIAN WINE AND BRANDY CORPORATION ACT 1980 AND
REGULATIONS 1981 TO PROTECT AUSTRALIA'S REPUTATION FOR PRODUCTION OF WINES
OF QUALITY AND INTEGRITY
Background
The Australian Wine and Brandy Corporation (AWBC) was established by the
Australian Wine and Brandy Corporation Act 1980 (the Act) in July 1981. The
AWBC is an Australian Government statutory marketing authority established
with the aim, among others, to promote and control the export of Australian
wine grape products. Consequently the AWBC has responsibility for
preserving Australian wine's internationally recognised reputation for
quality and integrity.
The AWBC's quality assurance and regulatory activities are codified in its
wine export procedures and the wine law compliance program.
The purpose of the Act, when it was enabled in 1980, was principally to
promote and control the export of grape product from Australia. At that
time Australian wine imports exceeded exports and some of the wine being
exported was of questionable quality. The export controls were instigated
to improve the quality of wine being exported and hence improve the
reputation of Australian wine. Provision was made in the Act for the
licensing of exporters and the issuing of permits for the export of grape
products which were assessed as being sound and merchantable and where they
met the importing countries' requirements.
In 1989 the Act was amended, at the request of industry, to include the
Label Integrity Program (LIP) requiring winemakers to keep records to
substantiate label claims. The objective of the LIP is to ensure truth in
labelling where claims are made concerning vintage, variety or geographical
indication of wine manufactured in Australia.
The AWBC conducts an audit program to monitor compliance with wine
manufacturing and labelling requirements. Audits may be triggered by
consumer or trade complaints, emerge from routine export inspection of wine
by the AWBC or be initiated by the AWBC on a random basis to assess the
accuracy of label claims. 170 audits were completed in 2006-07. The audits
assess whether a trail can be followed from the vine to the dispatch of an
export consignment.
Wine sector compliance with the legislative requirements continues to be
very high. The AWBC works hard to cultivate a culture of compliance within
the industry. It regularly discovers anomalies in label claims through the
export control procedures and consequently is able to prevent potentially
false or misleading labels being printed and/or applied to bottles. Most of
these anomalies are not fraudulent and are remedied without prosecution.
The Australian wine industry has become increasingly export orientated with
about 60 per cent of its production exported. Some 787 million litres of
wine at a value of $2.87 billion were exported in 2006-07 by approximately
1,800 licensed exporters of Australian wine.
The AWBC's role in maintaining the quality and integrity of Australian wine
is important and is valued by industry. Major wine marketing research
consistently shows that, in order of importance, consumers purchase wine
based on price, country or region of origin, grape variety and then brand.
This is recognised and reinforced by the wine retail sector who organise
their display shelves based on country of origin and who in many cases also
have special promotional activities based around country of origin, for
example, showcasing wines from Australia for the month.
In this global market place a selling point for Australian wine is its
reputation for quality and value for money.
Wine is not a homogenous product and individual producers have invested
heavily to differentiate their brand. Sales of Australian wine are none the
less vulnerable to a health or product standard scandal resulting from the
actions of a single person.
Therefore, particularly in export markets, Australian wine is vulnerable to
having the actions of individuals tainting views about Australia and an
effective legislative framework backed by strong enforcement provides
protection for the industry as a whole.
Regulation of both wine exports and wine exporters is seen as a way of
protecting against the adverse effects of a wine scandal of the type
experienced by the Austrian and Italian wine export industries. The
Austrian case involved seven winemakers adding small amounts of ethylene
glycol to add body and sweetness. The ensuing world wide publicity cost the
Austrian industry millions of dollars in export losses. Exports of Austrian
wine to the United Kingdom fell from 100,000 cases in 1985 to only 7,000
cases in 1989, and many producers went bankrupt. The Austrian wine industry
is only now getting back to its former size. This is despite the
promulgation by Austria of some of the most restrictive winemaking laws
aimed at regaining consumer confidence.
There have been many cases of wines from prestigious regions in Europe
found to have been sourced from less distinctive regions. For example, 9
million bottles of fake Chianti Classico were seized by Italian officials
in October 2005. The Australian wine industry believes that a reason for
the European industry losing market share is consumer and retailer cynicism
about label claims and the product the consumer is actually buying. In
contrast, Australian wine is known for the simplicity and integrity of
labelling. This is an effective marketing advantage.
The industry therefore places a high priority in operating under
legislation that works efficiently and effectively to provide the AWBC with
the powers to investigate and prosecute breaches of the Act.
Importing nations are increasingly testing the variety of wine to attempt
to detect fraud. Although these tests are not yet 100 per cent effective
they are relied upon by importing countries. Only a paper based audit trail
is able to provide the importer of the necessary assurance of variety and
region. The LIP should provide importers of Australian wine with the
assurance they need.
Issue to be addressed
In 2003, the AWBC began investigating allegations that some products
supplied by a wine producer were not consistent with the accompanying label
declaration. In conducting this investigation and exploring avenues for
prosecuting the alleged offender, the AWBC identified loopholes in the Act
that resulted in it being unable to adequately investigate the allegations
or launch a prosecution.
The fundamental problem concerns the LIP and its focus on wine
manufacturers keeping records rather than requiring an audit trail of the
growing, transport, manufacturing and sales chain. This is a flaw because a
fraud could occur at any stage in the system which would undermine the
integrity of the label and the information being supplied to consumers.
Other problems that arose during the investigation included the limited
injunctions power and an inability to stop the export of a product not
supported by an audit trail. These are also addressed in the RIS.
Label Integrity Program
Background
The explanatory memorandum to the Australian Wine and Brandy Corporation
Amendment Bill 1989 that established the LIP states that the LIP will
"enable the Corporation to trace a wine to the point where the grapes or
juice from which it was made were first harvested or processed."
The purpose of the auditing is to "ensure truth in labelling, thereby
increasing consumer confidence in the reliability of 'label claims' and
enhancing the reputation of Australian wine in domestic and export
markets."
As outlined above wine consumers are prepared to pay a premium for wine
produced from certain regions and for wines made from certain varieties
(see Table 1). Wine producers are therefore prepared to pay a premium for
grapes from certain regions and for particular varieties. However, as there
is no objective measure for assessing region or variety consumers identify
premium wines and regions from claims made on wine labels. An effective LIP
would provide consumers with certainty that they are buying the product
they pay for.
Table 1: Comparative prices for wine grapes by geographical indication,
2006-07[1], $AUD.
|Region |Cabernet |Chardonna|Merlot |Sauvignon|Semillon |Shiraz |
| |Sauvignon|y | |Blanc | | |
|Adelaide Hills |1,509.29 |1,607.03 |1,266.02 |1,678.94 |1,227.00 |1,648.17 |
|Adelaide Plains |1,093.40 |1,021.51 |965.06 |895.89 |757.28 |1,034.91 |
|Clare Valley |1,382.07 |1,208.86 |1,257.84 |1,092.69 |1,006.76 |1,502.64 |
|Riverland |570.62 |655.34 |550.51 |517.71 |438.04 |670.83 |
Issue to be addressed
For the AWBC to be able to guarantee the integrity of a wine label it has
to be able to confirm that the variety, region and vintage on the label
accurately report what was picked in the vineyard. This requires
traceability in the wine supply chain from the grapes to sale.
The LIP legislation is limited to wine manufacturers and does not cover
other players in the wine supply chain, such as wineries that do not make
wine but merely perform a limited range of grape juice processing
procedures as well as agents, growers, wholesalers and retailers. These
people play a fundamental role in the supply chain.
The practical effect of the LIP was illustrated when the AWBC investigated
a matter where there was evidence that a company deliberately collected
grapes in a particular region and transported them to a contract winery in
a second region and passed them off as grapes sourced in the second region
in order to receive a financial benefit. The LIP with its focus on the wine
manufacturer did not allow the AWBC to investigate the activities where the
alleged fraud occurred.
Objective:
The objective in seeking the amendments is to ensure that the Label
Integrity Program enables the AWBC to verify wine label claims by tracing
the supply chain from grape to the sale of the wine.
Options
1. No change
2. Abolish the Label Integrity Program
3. Provide the AWBC with the means to protect the integrity of Australian
wine by
. extending the LIP record making and keeping requirement to grape
growers/grape suppliers at the start of the LIP chain,
. extending the scope of LIP so that the LIP audit trail and other parts
of the AWBC legislation (such as Part VIB and the Export Regulations)
are integrated and can be better administered,
. aligning the audit trail requirements with current international best
practice on wine/food traceability, particularly the International
Organisation of Vine and Wine and the Codex Alimentarius,
. creating a situation where the same rules and recording requirements
apply to all activities and situations.
Impact analysis
Impact groups
. The estimated 7000 independent grape growers
. The estimated 2000 winemakers
. Wine wholesalers
. Wine retailers
. Traders and agents
. The AWBC (as administrator of the Act and regulations)
Option 1
The benefits of no change are that the industry is familiar with current
arrangements and would not face any costs of adopting new arrangements.
The cost of the 'no change' option is that it does not address the
identified problem. In many wine consuming nations, including Australia's
largest export markets, the use of particulars such as variety and vintage
are dependent on a geographical indication appearing on the bottle.
Regulators in these markets expect that label claims will be verifiable and
in the absence of an effective LIP may be reluctant to accept Australian
wine.
The Australian wine industry requested the LIP and has indicated it
believes an effective label integrity system is necessary. It fears that
under the current flawed LIP, consumers and the industry are unprotected
from some types of fraudulent behaviour with regard to the integrity of
wine labels. A scandal arising from a proven instance of mis-labelling has
the possibility of damaging domestic and export sales of Australian wine in
general, not just the wine that is the subject of the scandal.
The risk that importing countries and consumers could lose faith in the
dependability of the LIP is high under the 'no change' option.
Option 2
There would be only a marginal benefit for winemakers if the LIP was
removed from the Act and any benefits may be more apparent than real.
Claims of variety or vintage may still need to be verified under the Trade
Practices Act. In many wine consuming nations, including Australia's
largest export markets, the use of particulars such as variety and vintage
are dependent on a geographical indication appearing on the bottle.
Regulators in these markets expect that label claims will be verifiable
and, in the absence of a national system such as the LIP, may be reluctant
to accept Australian wine.
As the LIP does not currently extend to other participants in the wine
audit trail, they would not be affected.
The Australian wine industry requested the LIP and in consultations has
indicated it still supports the LIP. It fears that the abolition of the LIP
could result in consumers and the industry being left unprotected from some
types of fraudulent behaviour with regard to the integrity of wine labels.
A scandal arising from a proven instance of mis-labelling has the
possibility of damaging domestic and export sales of Australian wine in
general, not just the subject of the scandal.
Option 3
This would allow the AWBC to trace a batch of wine from the retailer to the
vineyard and confirm that the details that appear on the label are
consistent at each point of the supply chain.
It will extend the coverage of the LIP to all wines, not just those that
make a claim with regard to vintage, variety, geographical indication. In
practice, most wineries already record this information for all wines.
There are no statistics kept regarding the percentage of label claims made
in Australia. Statistics kept for geographical indication claims for
Australian wine exports indicate that more than 90 per cent of packaged
wines carry a geographical indication claim. That figure would almost
certainly apply for domestic wines and AWBC surveillance has shown that
even a substantial percentage of cleanskin wines still carry a label claim
as to vintage, variety and geographical indication.
Under current LIP legislation, for every wine grape delivery the grower has
to declare the vintage, variety and geographical indication of the grapes
because the wine manufacturer has to record that information (even where it
is known that no label claim will subsequently be made).
While wine growers will be free to make and keep their own records (and
many do) the standard grape delivery docket issued by receiving wineries to
wine grape growers and standard payment records provided by wineries will
in most instances be sufficient record in themselves.
We are advised that not all grape growers record the geographical
indication of the vineyard in which the grapes were grown. However, as
geographical indications are widely known within the grape growing and
winemaking community this adjustment cost is not expected to be a
significant burden.
Therefore, it is not expected that the amended LIP provisions will add to
the administrative workload of growers, makers and deliverers who use
delivery dockets.
The integrity gained by growers recording full label claim information is
achieved by having a record of the grapes supplied to manufacturers. This
record can be compared to grape receival label claims and subsequent label
claims made by manufacturers. The fact that the manufacturer's payment
advice to the grower may form a substantial part of the records needed to
be kept by the grower reduces the opportunity for the manufacturer to later
alter the label claims for a wine.
Growers will be required to keep records for seven years. The records will
typically be in the form of a grape delivery docket which is kept by
growers or their accountants for tax purposes.
Wholesalers and retailers typically keep the required records through bar
codes or on paper. Most billable material under this option should contain
the information. Therefore, it is not expected that the amended LIP
provisions will add to the administrative workload of wholesalers and
retailers.
It is important to note that those now to be included within the LIP record
keeping provisions are already covered by the Part VIB provisions (Register
of Protected Names, false and misleading provisions, blending rules) and
the Export Regulations provisions, and they are already included in the
Inspection Powers provisions of Part VIA of the AWBC Act. The proposal is
extending the record keeping requirements.
The main benefit to consumers and industry is improved certainty that
Australian wine labels are truthful and accurate.
Consultation
The AWBC, as the responsible authority, requested the amendments. The
amendments are supported by the Winemakers' Federation of Australia (WFA),
the national representative body for winemakers with voluntary membership
representing more than 95 per cent of the wine produced in Australia.
The amendments have been discussed at, and are supported by the Legislation
Review Committee (LRC) of the AWBC. The LRC consists of representatives
from WFA, an independent lawyer and the major wine companies.
A representative of Wine Grape Growers Australia (WGGA) also attended the
LRC and supports the amendments including the requirement that wine grape
growers keep a record of the geographical indication in which the grapes
were grown.
Conclusion and recommended option
Option 3 is the preferred option. It provides the AWBC and industry with an
improved label integrity system without additional cost to industry or
government. It will provide the AWBC with a comprehensive system allowing a
wine product to be traced from the grape vine to final sale. It also has
the support of industry bodies.
Injunctions Power
Issue to be addressed
The AWBC can seek an injunction under Part VIB (Register of Protected
Names, false and misleading provisions, blending rules) but cannot seek
injunctions as tool for policing other Parts of the Act.
If a person is suspected of breaching one of the objects of the Act (eg.
truth in labelling or the export controls) the AWBC is unable to prevent
the person from taking an action that could damage the reputation of the
wine industry.
The AWBC has been involved in a situation where this narrow injunctions
power meant it was unable to prevent the sale of a product in a situation
where the company was unable or unwilling to provide records to
substantiate the integrity of that product.
Even if a person has been convicted of an offence under the Act, unless the
offence is in relation to Part VIB and an injunction can be obtained, the
AWBC cannot stop the person from continuing to breach the Act.
Objective
The objective of the amendments is to provide the AWBC with the means to
protect the reputation for quality of the Australian wine industry where a
person is performing actions that may be contrary to the Act.
Options
1. Take no action.
2. Amend the AWBC Act to provide the AWBC the power to apply for an
injunction to stop or to direct a person engaging in action that may
be contrary to the objects of the Act.
Impact analysis
Impact groups
Potentially
. The estimated 7000 independent grape growers
. The estimated 2000 winemakers
. Wine wholesalers
. Wine retailers
. Traders and agents
. The AWBC (as administrator of the Act and regulations)
Option 1
Under this option the AWBC will continue to be in a position where it is
limited in its ability to fulfil its obligation to enforce the Act. There
will be circumstances in which it is aware of a breach of the Act but is
unable to take action to prevent the breach recurring, with the consequence
that the international wine community may consider that Australia does not
have the capacity to enforce its wine laws.
Option 2
An expanded power to seek injunctions will provide the AWBC with a means to
prevent behaviour that breaches the Act. It will have no costs to the
majority of the wine industry against whom an injunction will not be
sought.
It is expected that the AWBC would only very rarely seek injunctions as
suspected breaches of the Act have been very few and in most cases have
been resolved without a resort to legal action.
The safeguard against misuse of this power is that injunctions are issued
by court and are subject to a court hearing where the court hears arguments
from both parties and can make orders for costs.
Consultation
The AWBC, as the responsible authority, requested the amendments. The
amendments are supported by the Winemakers' Federation of Australia (WFA),
the national representative body for winemakers with voluntary membership
representing more than 95 per cent of the wine produced in Australia.
The amendments have been discussed at, and are supported by the Legislation
Review Committee (LRC) of the AWBC. The LRC consists of representatives
from WFA, an independent lawyer and the major wine companies. A
representative of WGGA also attended the LRC and supports the amendments.
Conclusion and recommended option
Option 2 is the preferred option as it provides the AWBC with a means to
stop an event occurring that is in breach of the Act and so provides a
means of better enforcement of the Act.
The proposal to amend the Act to provide the AWBC the power to apply for an
injunction to stop or to direct a person engaging in action that may be
contrary to the objects of the Act
. has the support of industry bodies;
. has the potential to benefit the industry by strengthening the
ability of the AWBC to prevent breaches of the Act; and
. is not expected to impose additional on government or the majority
of industry that complies with the legislation.
Circumstances in which the AWBC can prohibit the export of a grape product
Issue to be addressed
The Act and the Australian Wine and Brandy Corporation Regulations
1981(AWBC Regulations) provide the AWBC with general export controls. The
legislation requires the AWBC to:
. issue licences to export wine;
. issue certificates for exports of Australian wine; and
. run a label integrity program to validate claims relating to wine
variety, wine region and vintage.
AWBC Regulation 5 provides the matters the AWBC shall take into account
when considering whether to issue a person a licence to export grape
products. AWBC Regulation 6 provides conditions that are necessary to be
met before a wine product can be exported. AWBC Regulation 7 provides that
if the conditions of export are not met the AWBC must refuse to issue an
export certificate.
The AWBC Regulations do not give the AWBC a power to stop the export of
wine where no LIP audit trail records are available to support the
integrity of the wine goods or where there is doubt as to the integrity of
the goods.
The AWBC has had recent experience where it was unable to prevent the
export of a product where a company was unable or unwilling to provide
records to substantiate the integrity of the product. Authorities in
international markets can and do analyse wines to test that label claims
are accurate. If a fraudulent claim were to be discovered this could have a
detrimental effect on the reputation and sales of the broader industry.
Objective
To provide the AWBC with the means to refuse the export of wine goods where
no audit trail records are produced to support the integrity of the wine
goods.
Options
1. Maintain the status quo.
2. Provide the AWBC with the power to:
i. refuse the export of the relevant wine goods, by any party,
until such time as the AWBC is satisfied as to the integrity
of the product; and
ii. where a person refuses or is unable to produce records to verify
label claims or other information (to be specified in the
Regulations) required by the AWBC in its normal business, to
refuse the export of the relevant wine goods, by any party,
until such time as the AWBC is satisfied as to the integrity
of the product.
AWBC Regulation 10 would continue to provide a right of appeal to the
Administrative Appeals Tribunal in the event that the AWBC does refuse the
export of the relevant wine goods.
Impact analysis
Impact groups
Potentially, all 1800 licensed wine exporters, but in practice only those
that breach the legislation. The AWBC has cancelled just one export
licence, although it has suspended five and has had reason to seek to
cancel an export permit on approximately 15 occasions.
Option 1
While Option 1 imposes no new costs and has the benefit that the industry
is familiar with the current requirements, it also has the weakness of
maintaining a system that experience has shown to have gaps and loopholes
that are able to be exploited, and which has potential to impose costs on
the industry.
Option 2
Option 2 imposes no compliance costs on the majority of industry because it
would not change any existing practices. It is only in the very small
minority of instances where a company is unable to demonstrate the
integrity of the goods that there may be a cost in that an export
certificate may be refused.
The refusal of an export certificate could significantly affect a wine
exporter. Certificates are issued for all exports of over 100 litres with
an average export certificate being for about 12,000 litres. It is not
possible to quantify the cost to exporter of refusing a certificate.
However it is not a power that the AWBC would be expected to use regularly
and it could only be used after a prospective exporter has refused or
proven unable to verify a label claim or other relevant information
specified in the Regulations required by the AWBC.
The aim of the proposal is to give the AWBC greater power in the very few
instances where an exporter is suspected of breaching the Act or a breach
has been proven.
The AWBC has only recently encountered a situation where it was unable to
prevent the export of a wine where it was unable to verify the label
claims. This instance exposed a loophole in Australia's export
certification procedures. If this loophole is not closed it exposes the
Australian wine industry to an increased possibility of a negative
publicity that could disrupt sales of, and impose costs on innocent
parties.
Australian wine has a reputation for label integrity. If this reputation is
threatened it could affect sales. The introduction of a provision that
allows the AWBC to halt an export where the integrity of the product is not
proven could therefore benefit the entire industry.
Review by the Administrative Appeals Tribunal of AWBC decisions would
ensure that the provision is not 'misused'.
Consultation
The AWBC, as the regulator, requested the amendments. The amendments are
supported by the Winemakers' Federation of Australia (WFA), the national
representative body for winemakers with voluntary membership representing
more than 95 per cent of the wine produced in Australia.
The amendments have been discussed at, and are supported by the Legislation
Review Committee of the AWBC. The LRC consists of representatives from WFA,
an independent lawyer and the major wine companies. A representative of
WGGA also attended the LRC and supports the amendments.
Conclusion and recommended option
Option 2 is the preferred option as it provides the AWBC with a means to
stop an event occurring that is in breach of the Act and so provides a
means of better enforcement of the Act.
The proposal to amend the Regulations to provide the AWBC the power to
refuse the export of wine goods where a party refuses to produce
appropriate documentation or the AWBC is not satisfied as to the integrity
of the wine goods:
. has the full support of industry bodies;
. has the potential to benefit the industry by strengthening the
ability of the AWBC to protect the integrity of wine exports; and
. is expected to impose no additional costs on government or the
majority of industry that complies with the legislation.
Implementation and review
The amendments are to be implemented as soon as practicable, depending on
the legislative process.
The amendments will be notified to the industry through an announcement by
the Minister for Agriculture, Fisheries and Forestry, and through AWBC and
WFA industry newsletters and Internet sites.
While the proposed amendments do not require additional record keeping they
will require that records be kept for longer than is currently the case.
Therefore the AWBC, WFA and WGGA will undertake an educational campaign
through regional grape grower and winemaker associations to ensure that
grape growers are aware of the new rules. The AWBC is developing a program
to advise and educate retailers of the new requirements.
The Department of Agriculture, Fisheries and Forestry will monitor the
legislation and review it as necessary.
Wine Policy Section
Agricultural Productivity Division
Australian Government Department of Agriculture, Fisheries and Forestry
June 2008
AUSTRALIAN WINE AND BRANDY CORPORATION AMENDMENT BILL 2009
NOTES ON ITEMS
Section 1 Short Title
This item is a formal provision specifying the short title of the Act as
the Australian Wine and Brandy Corporation Amendment Act 2009.
Section 2 Commencement
Item 2 inserts a three column table setting out commencement information
for the various provisions in the Act. Each provision of the Act specified
in column 1 of the table commences (or is taken to have commenced) in
accordance with column 2 of the table and any other statement in column 2
has effect according to its terms. Column 3 is empty and may be used in
published versions of the Act to state the date of commencement in each
Schedule.
Table item 1 provides that Sections 1 to 3 commence on Royal Assent.
Table item 2 provides that Schedule 1 commences on a date to be fixed by
Proclamation. This date is likely to be when the Australia- European
Community on Trade in Wine enters into force, on the first day of the
second month following the exchange of letters between Australia and the
European Community advising that their respective requirements for entry
into force of the Agreement have been complied with.
Table item 3 provides that Schedule 2 commences on a date to be fixed by
Proclamation.
Table item 4 provides that Part 1 of Schedule 3 commences on the 28th day
after Royal Assent.
The commencement provision of table item 5 is designed to ensure that Part
2 of Schedule 3 does not commence before Schedule 1 commences.
Table item 6 provides that Part 3 of Schedule 3 commences when Part 1 of
Schedule 3 commences, that is on the 28th day after Royal Assent.
Section 3 Schedules
This item provides that the legislation referred to in each Schedule of the
Bill will be amended or repealed in accordance with the terms in that
Schedule.
SCHEDULE 1 - AMENDMENTS RELATING TO THE AGREEMENT BETWEEN AUSTRALIA AND THE
EUROPEAN COMMUNITY ON TRADE IN WINE
Part 1 - Amendments
Australian Wine and Brandy Corporation Act 1980
Item 1 Paragraph 3(1)(e)
This amendment clarifies that the objective of the Act is to meet the
obligations of all relevant international agreements to which Australia is
party.
Item 2 Paragraph 3(1)(f)
This subsection of the Act is being repealed because subsections 3(1)(a-e)
state the objectives of the Act clearly, rendering 3(1)(f) redundant.
Item 3 Subsection 4(1) (paragraph (a) of the definition of agreement
country)
The reference to the European Economic Community is updated to reflect that
Australia's partner in the new agreement on trade in wine is the European
Community, the successor legal entity to the European Economic Community.
Item 4 Subsection 4(1)
This amendment provides that country, for the purposes of the Act, the term
has the special meaning at 4(2) of the Act.
Item 5 Subsection 4(1)
A designated foreign country is one for which geographical indications have
been included on the Register of Protected Geographical Indications and
Other Terms.
Item 6 Subsection 4(1) (definition of EC country)
The reference to the European Economic Community is updated to reflect that
Australia's partner in the new agreement on trade in wine is the European
Community (EC), the successor legal entity to the European Economic
Community.
Item 7 Subsection 4(1) (definition of geographical indication)
This amendment aligns the definition of the term geographical indication
with that set out at Article 22.1 of the 1994 World Trade Organisation
Agreement on Trade Related Aspects of Intellectual Property Rights.
The definition is also used in the Trade Marks Act 1995, except that the
definition in the Australian Wine and Brandy Corporation Act 1980 (AWBC
Act) refers only to wine goods, reflecting the narrow focus of the AWBC
Act.
Item 8 Subsection 4(1) (definition of modify)
The list of requirements in the definition of the term modify is
comprehensive and does not need to allow for other elements.
Item 9 Subsection 4(1)
This amendment states that the definition of the term protection date as it
applies to a registered traditional expression is at Item 37 (Subsection
40DB(6)) of the Bill.
Item 10 Subsection 4(1) (definition of Register)
This amendment reflects the change in name of the Register of Protected
Names to the Register of Protected Geographical Indications and Other
Terms.
Item 11 Subsection 4(1)
This item provides a definition of registered additional term as a term
included in Part 4 of the Register of Protected Geographical Indications
and Other Terms.
Item 12 Subsection 4(1) (definition of registered ancillary protected
expression)
This definition is redundant as all references to registered ancillary
protected expression(s) have been repealed from the Act.
Item 13 Subsection 4(1) (definition of registered condition)
The definition of registered condition is to be repealed because this term
has been replaced by the term registered conditions of use.
Item 14 Subsection 4(1)
This amendment provides a definition of the term registered conditions of
use, which is outlined in Section 40G of the Bill.
Item 15 Subsection 4(1) (definition of registered geographical
indication)
This amendment clarifies that a registered geographical indication is
included in Part 1 of the Register of Protected Geographical Indications
and Other Terms.
Item 16 Subsection 4(1)
This amendment defines a registered quality wine term as a term, which is
included in Part 3 of the Register of Protected Geographical Indications
and Other Terms.
Item 17 Subsection 4(1) (definition of registered traditional
expression)
This amendment clarifies that a registered traditional expression is
included in Part 2 of the Register of Protected Geographical Indications
and Other Terms.
Item 18 Subsection 4(1)
This amendment clarifies that a registered translation of a registered
geographical indications is included in Part 1 of the Register of Protected
Geographical Indications and Other Terms.
Item 19 Subsection 4(1) (definition of registered variety of grapes)
This definition is to be repealed as Australia has removed the capacity to
register varieties of grapes on the Register of Protected Geographical
Indications and Other Terms. Therefore, the definition is redundant.
Item 20 Subsection 4(1) (definition of Registrar)
This definition changes the name of the Registrar to the Registrar of
Protected Geographical Indications and Other Terms.
Item 21 Subsection 4(1) (definition of traditional expression)
This definition of traditional expression is the same as in the Australia -
European Community (EC) Agreement on Trade in Wine except that it does not
restrict traditional expression(s) to wines originating in the EC.
Item 22 Subsection 4(1)
This amendment provides a definition for the World Trade Organization
(WTO), which is referred to at section 4(2) of the Act.
Item 23 After Subsection 4(1)
This amendment defines that any reference to a country in this Act includes
a member of the World Trade Organization such as a regional economic
integration organisation or an autonomous customs territory.
Item 24 Subsection 4(3)
The reference to the European Economic Community is updated to reflect that
Australia's partner in the new agreement on trade in wine is the European
Community, the successor legal entity to the European Economic Community.
Item 25 Section 5C
This amendment broadens the definition of description and presentation of
the previous Act to include the term indications which reflects a change in
the definition of the term geographical indication.
Item 26 Paragraph 8(2)(aa)
This amendment provides the Australian Wine and Brandy Corporation (AWBC)
with the power to determine conditions of use for registered geographical
indications (GIs) and registered translations of registered GIs. It
provides for the AWBC to put conditions on GIs independently of the
Geographical Indications Committee. For example, if a GI is determined and
included on the Register of Protected Geographical Indications and Other
Terms without conditions and a homonymous GI is later determined, the AWBC
will have the power to place conditions of use on the registered GI.
Item 27 Paragraph 8(2)(ab)
This paragraph is to be repealed due to the Act no longer recognizing
Australian traditional expressions.
Item 28 Paragraph 8(2)(ac) and (ad)
This amendment relates to the specific powers of the Australian Wine and
Brandy Corporation (AWBC) under the Act.
Subsection 8(2)(ac) repeals the reference to ancillary protected
expressions as this term is no longer used in the Act. The new subsection
provides for the AWBC to determine traditional expressions (TEs) and
conditions of use for those TEs from any foreign country.
Subsection 8(2)(ad) provides the AWBC with the power to determine
additional terms and conditions of use for those additional terms.
Item 29 Paragraph 8(2)(ae)
This paragraph is to be repealed due to the Act no longer recognising the
defined term registered variety of grapes.
Item 30 After paragraph 8(2)(g)
This amendment provides for the Australian Wine and Brandy Corporation to
charge fees for work undertaken by the Geographical Indications Committee.
Item 31 Subsection 8(2A)
This amendment amends the lists of those items of section 8(2) for which a
determination by the Australian Wine and Brandy Corporation must be in
writing and under the common seal to include Subsections 8(2)(ac) or
8(2)(ad).
Item 32 Subsection 8(2F)
Subsection 8(2F)(1A) provides a timeframe for appeals of Australian Wine
and Brandy Corporation (AWBC) decisions to be made to the Administrative
Appeals Tribunal (AAT). The amendment alters the list of items in section
8(2) covered by this section to include Subsections 8(2)(ac) or 8(2)(ad).
Subsection 8(2F)(1B) provides a restriction on the timeframe for appeals to
the AAT. The amendment alters the list of items in section 8(2) covered by
this section to include Subsections 8(2)(ac) or 8(2)(ad).
Item 33 Subsection 38(4)
This amendment corrects a minor formatting error in the Act.
Item 34 Subsection 38(4)
This amendment has the effect of requiring the Australian Wine and Brandy
Corporation to include in its Annual Report a report on the number of
translations of geographical indications that the Geographical Indications
Committee determined during the reporting year.
Item 35 Part VIB (heading)
The heading is to be changed in order to more clearly articulate the
overarching objective of this section of the Act. Part VIB provides the
basis for the protection of registered geographical indications (GIs),
registered translations of GIs, and other terms such as registered
traditional expressions.
Item 36 Paragraph 40A(a)
This amendment clarifies that the objective of Part VIB is to meet the
obligations of all relevant international agreements to which Australia is
party.
Item 37 Sections 40C to 40H
This item repeals sections 40C to 40H and replaces them as described below.
Section 40C(1) makes it an offence to sell, export or import wine, in trade
or commerce, with a false description and presentation. The following fault
elements apply to the offence:
(a) intention applies to whether or not the person sold, exported or
imported wine;
(b) recklessness applies to whether or not the person sold, exported or
imported the wine in trade or commerce;
(c) recklessness applies to whether or not the description and presentation
of the wine includes a registered Geographical Indication (GI), a
registered translation of such an indication, a registered traditional
expression (TE), a registered quality wine term or a registered
additional term; and
(d) recklessness applies to whether or not the description and presentation
of the wine does not comply with any registered conditions of use
applicable to the GI, translation, TE, quality wine term or additional
term.
Under the current system the penalty provision for selling a wine with a
false or misleading description and presentation is subject to the fault
element of intention. The mental element of intention could allow a person
to avoid liability by giving incontestable evidence that they had no
intention to mislead. This barrier to prosecution has been the catalyst for
changing the fault element to recklessness. The amendment also brings the
offence provisions in line with the Criminal Code Act 1995.
This amended offence provision will apply to all elements of the supply
chain. However, the risk of prosecution for those who conduct their
business in accordance with the rules and act in good faith is low.
For example, a small wine retailer is unlikely to be liable for prosection
if they bought a bottle of wine with a false or misleading description and
presentation, in good faith, from a wholesaler and sold that wine in their
store. To be liable for prosecution under the amended provision, the small
wine retailer would need to be aware of a substantial risk that the wine
from the wholesaler had a false and misleading description and
presentation, and irrespective of that risk, sold the bottle of wine with
that description.
If a person sells, exports or imports wine with a false description and/or
presentation, the person faces imprisonment for 2 years, or a maximum fine
of 120 penalty units instead of, or in addition to imprisonment.
Subsection 40C(2) states that the description and presentation may be false
even if it indicates the country, region or locality in which the wine
originates.
Subsection 40D provides meaning for the term false description and
presentation as it applies to section 40C of the Act.
Subsection 40D(2)(a) makes it false to use the name of a country, or any
other indication that the wine originated in a particular country (for
example, a national flag on a label), when the wine did not originate in
that country.
Subsection 40D(2)(b) makes it false to use a GI on a wine if the wine did
not originate in the particular country, region or locality in relation to
which the GI is registered.
Subsection 40D(2)(c) makes it false to use a registered translation of a
registered GI if the wine did not originate in the particular country,
region or locality in relation to which the GI is registered.
Subsection 40D(2)(d) makes the description and presentation of a wine false
if it includes a registered TE in the language in relation to which the
expression is registered and the wine is in the category of wine in
relation to which the expression is registered and the wine is not a wine
in relation to which the expression is registered (TEs are listed in Annex
III of the Australia - European Community (EC) Agreement on Trade in Wine
(the Agreement) according to their country, under the headings Wine
Concerned, Wine Category, and Language. Subsection 40D(2)(d)(i) refers to
the wine concerned, subsection 40D(2)(d)(ii) refers to the wine category
and 40D(2)(d)(iii) refers to the language of the TE.) For example:
. Reserva is listed in Annex III of the Agreement as a TE for Spain and
Portugal in Spanish and Portuguese respectively. Riserva is also
listed in Annex III as a TE for Italy in Italian. Reserve in English
is not listed and is therefore not protected so Australian producers
can continue to use Reserve in the description and presentation of
their wine.
. Vintage is listed in Annex III of the Agreement as a TE in English for
DO Porto wines in the wine category of Quality liqueur wine psr (in
Australia this equates to fortified wines). Under this section, the
term vintage in English can therefore continued to be used in the
description and presentation of Australian wines other than fortified
wines. (It is important to note, however, that the term vintage in
English is a quality wine term in relation to wines originating in
Australia and can be used in the description and presentation of
Australian fortified wines provided the registered conditions of use
are complied with.)
Subsection 40D(2)(e) provides that the Regulations may prescribe other
circumstances when the description and presentation will be false.
Subsection 40D(3) provides that subsection 40D(2) is not an exhaustive list
of circumstances when the description and presentation of a wine is false.
Subsection 40D(4) provides that a registered GI, registered translation of
a registered GI, or registered TE accompanied by an expression such as
"kind", "type", "style", "imitation", "method", or any other similar
expression used in the description and presentation of a wine is subject to
the false provisions of Section 40. For example:
. an Australian producer would not be able to label their wine as a
"Burgundy Style" even though it may be produced in the same way as
those wine producers in the Bourgogne GI in France.
. an Australian producer of Riesling could not use the phrase "Clare
Valley Method Riesling" on a wine made from Riesling grapes grown in
the McLaren Vale.
Section 40DA sets out in detail the circumstances in which the description
is not false.
Subsection 40DA(1)(a), (b) and (c) provide that if a registered GI that is
identical to another registered GI is included in the description and
presentation of wine, the inclusion of the indication will not make the
description and presentation false. However, the description and
presentation may be false for another reason.
Subsection 40DA(2) provides that the use, in good faith, of common English
words, which also include a word or term that is a registered GI,
registered translation of a GI, or a registered TE in relation to a
country, region or locality in the description and presentation of wine is
not false merely because it includes the word or term.
For example, the use of "port" in a place name does not preclude it from
being a common English word.
Subsection 40DA(3) provides for the situation where the name of a winemaker
is also a registered GI, registered translation of a GI or a registered TE.
The subsection provides that winemaker's name can be used in the
description and presentation of a wine. It also provides that the
individual's name is not false if the person using the name is legally
entitled to do so. This allows a winemaker to sell a brand or business
established with the winemaker's name, and for successors in business to
continue to use the name
Section 40DB provides details of circumstances in which description and
presentation is not false with regard to TEs.
Subsection 40DB(1) provides that if an Australian wine uses a registered
quality wine term in its description and presentation, then the description
and presentation is not false, even if the registered quality wine term is
also a registered TE, and the wine is in the same category of wine in
relation to that which the TE is registered.
For example, an Australian producer can use the quality wine term Solera in
its description and presentation of a wine as long as it complies with the
registered conditions of use.
Subsection 40DB(2) provides that foreign countries that are not agreement
countries can use TEs to describe their wine, provided consumers are not
misled, the origin of the product is stated, and the use does not
constitute unfair competition as that term is understood in Article 10bis
of the Paris Convention for the Protection of Industrial Property of 20
March 1883 as amended.
Subsection 40DB(3) provides that if a trade mark contains or consists of a
registered TE, then the description and presentation of the wine is not
false merely because it includes the trade mark as long as that trade mark
was entered in good faith in the Register of Trade Marks or the owner of
the trade mark had acquired rights in the trade mark through use in good
faith, before the protection date for the TE.
For example, a trade mark which includes the word Chateau can continue to
be used in Australia after the term Chateau is protected under the
Agreement.
Subsection 40DB(4) provides a carve out for those businesses which have a
name which includes a registered TE, so long as the name was registered in
good faith under the law of a State or Territory before the date of
protection of the TE.
Subsection 40DB(5) explains that subsection 40DB(4) does not limit, in any
way, subsection 40DA(3).
Subsection 40DB(6) defines the protection date as either the date on which
the relevant prescribed wine-trading agreement was signed or the date the
agreement was modified to include the TE.
For non-agreement countries, subsection 40DB(6)(b) states that the
protection date for a TE is the date on which the TE is registered.
Section 40E sets out the offence provisions for the sale, export or import
of wine with a misleading description and presentation.
Subsection 40E(1) provides the Act with offence provisions in relation to
selling, exporting or importing wine with a misleading description and
presentation.
The fault elements that will apply to each aspect of this offence are the
same as will apply in relation to Section 40C (that is, intention for
paragraph (1)(a) and recklessness for paragraph (1)(b)).
The amendment simplifies the offence provision by stating that if a person
sells, exports or imports wine with a misleading description and/or
presentation, the person faces imprisonment for 2 years, or a maximum fine
of 120 penalty units instead of, or in addition to imprisonment.
Subsection 40E(2) states that the description and presentation may be
misleading even if it indicates the country, region or locality in which
the wine originated.
Section 40F provides meaning for the term misleading description and
presentation as it applies to this section of the Act.
Subsection 40F(1) states that 40F has effect for the purposes of section
40E.
Subsection 40F(2) provides that a description and presentation of wine is
misleading if it includes a registered GI or a registered translation of a
registered GI and the indication or translation is used in a way which is
likely to mislead a consumer as to the country, region or locality in which
the wine originated. TEs will be listed in the Register of Protected
Geographical Indications and Other Terms according to their country, under
the headings: Wine Concerned; Wine Category; and Language. Subsection
40F(2)(c)(i) refers to the wine concerned, subsection 40F(2)(c)(ii) refers
to the category of wine and 40F(2)(c)(iii) refers to the language of the
TE.
The description and presentation of a wine is misleading if:
. it includes a registered TE in the language in relation to which the
expression is registered;
. the wine is not in the category of wine in relation to which the
expression is registered;
. the wine is not a wine in relation to which the expression is
registered;
. the expression is used in such a way as to be likely to mislead that
the wine originated in a country, region or locality in relation to
which the expression is registered; or
. that the wine is in a category of wine in relation to which the
expression is registered.
Under the current system the penalty provision for selling a wine with a
false or misleading description and presentation is subject to the fault
element of intention. The mental element of intention could allow a person
to avoid liability by giving incontestable evidence that they had no
intention to mislead. This barrier to prosecution has been the catalyst for
changing the fault element to recklessness. The amendment also brings the
offence provisions in line with the Criminal Code Act 1995.
This amended offence provision will apply to all elements of the supply
chain. However, the risk of prosecution for those who conduct their
business in accordance with the rules and act in good faith is low.
For example, a small wine retailer is unlikely to be liable if they bought
a bottle of wine with a false or misleading description and presentation,
in good faith, from a wholesaler and sold that wine in their store. To be
liable for prosecution under the amended provision, the small wine retailer
would need to be aware of a substantial risk that the wine from the
wholesaler had a false and misleading description and presentation, and
irrespective of that risk, sold the bottle of wine with that description.
Subsection 40F(3) provides that a registered GI, registered translation of
a registered GI, or registered TE accompanied by an expression such as
"kind", "type", "style", "imitation", "method", or any other similar
expression used in the description and presentation of a wine is subject to
the misleading provisions of Section 40E.
Subsections 40F(4)(a) and (b) provide that the description and presentation
of wine is misleading if it includes an indication or term that so
resembles a registered GI or a registered translation of a registered GI as
to be likely to mislead that the wine originated in a country, region or
locality in relation to which the indication is registered.
Subsection 40F(4)(c) provides that the description and presentation of wine
from a foreign country that is not an agreement country is misleading if it
includes a term that so resembles a registered TE as to be likely to
mislead that the wine originated in the country, region or locality in
relation to which the expression is registered, or that the wine is in a
category of wine in relation to which the expression is registered.
Subsection 40F(5) provides that the description and presentation of a wine
is misleading if it includes the name of an individual, the name of a
winery or the address of a winery, and these names or address are used in
such as a way as to be likely to mislead as to the country, region or
locality in which the wine originated.
To provide a fictional example, if a McLaren Vale producer's address was
"Barossa Valley Road", and that producer included the text "Barossa Valley"
in large letters on its wine label, while McLaren Vale was written in small
text, this may be misleading.
Subsection 40F(6) provides that the Regulations may prescribe other
circumstances when the description and presentation will be misleading.
Subsection 40F(7) provides that subsections 40F(2), (3), (4), (5) and (6)
do not limit the circumstances in which a description and presentation can
be misleading.
Subsection 40FA provides circumstances in which the description and
presentation is not misleading.
Subsection 40FA(1) provides that the description and presentation of a wine
is not misleading merely because the indication or term is, or resembles, a
registered GI, a registered translation of a registered GI, or a registered
TE, in relation to another country, region or locality. This means that it
will be possible for two registered GIs or registered translations of GIs
which are homonyms of each other to be used concurrently in the market if
each is being used in accordance with authorised conditions of use that
differentiate one from the other.
Subsection 40FA(2) provides that if the description and presentation of a
wine includes a word or a term that is also a registered GI, translation of
a registered GI, or a registered TE, then the description and presentation
is not misleading merely because:
. the word or term is a common English word or term; and
. the word or term is not used in such a way as to indicate that the
wine originated in the country, region or locality in relation to
which the GI, translation or TE is registered; and
. the word or term is used in good faith.
Subsection 40FB provides circumstances in which description and
presentation is not misleading - including TEs and quality wine terms.
Subsection 40FB(1) provides that if the description and presentation of a
wine includes a registered quality wine term, and the description and
presentation of the wine states that the wine originated in Australia or in
a region or locality in Australia, then the description and presentation of
this wine is not misleading merely because the quality wine term is also a
registered TE and the wine is in a category of wine in relation to which
the TE is registered.
Subsection 40FB(2) provides that if the description and presentation of a
wine includes a trade mark and the trade mark includes a registered TE,
then as long as the trade mark was entered in good faith in the Register of
Trade Marks, or the owner of the trade mark had acquired rights in the
trade mark through use in good faith, before the protection date for the
TE, the description and presentation is not misleading merely because it
includes that trade mark.
Subsection 40FB(3) provides that if the description and presentation of
wine includes a business name and the business name contains or consists of
a registered TE, then as long as the business name was registered in good
faith under applicable State or Territory laws, then the description and
presentation of a wine is not misleading merely because it includes the
business name.
Subsection 40FB(4) provides that subsection 40FB(3) does not limit
subsection 40F(5).
Section 40G makes it an offence to sell export or import wine in
contravention of registered conditions of use.
Subsection 40G(1) provides that a person commits an offence if the person
sells, exports or imports wine, in trade or commerce, with a description
and presentation that includes a registered GI, a registered translation of
a registered GI, a registered TE, a registered quality wine term, or a
registered additional term and does not comply with the registered
conditions of use.
The fault elements that apply in relation to section 40G(1) are:
(a) intention applies to whether or not the person sold, exported or
imported wine; and
(b) recklessness applies to whether or not the person sold, exported or
imported the wine in trade or commerce; and
(c) recklessness applies to whether or not the description and presentation
of the wine includes a registered GI, a registered translation of a
registered GI, a registered TE, a registered quality wine term or a
registered additional term; and
(d) recklessness applies to whether or not the description and presentation
of the wine does not comply with any registered conditions of use
applicable to the GI, translation, TE, quality wine term or additional
term.
This offence attracts a penalty of imprisonment for 1 year, or a maximum
fine of 120 penalty units instead of, or in addition to imprisonment.
Should a body corporate be convicted, they may be fined up to 5 times that
maximum fine (600 penalty units).
Subsections 40G(2) and 40G(3) provide details of circumstances in which the
offence provisions stated in 40G(1) do not apply.
Subsection 40G(2) provides that 40G(1) does not apply if a producer uses a
registered indication or term which is registered in one or more parts of
the Register in a description and presentation if:
. the user complies with the registered conditions of use for that
indication or term; and
. in the description and presentation, the country, region or locality
from which the wine originated is indicated.
This subsection notes that the defendant bears an evidential burden in
relation to the matters in this subsection.
Subsection 40G(3) also provides that 40G(1) does not apply if a producer
uses a registered additional term which appears more than once on the
Register if the producer complies with the applicable terms and conditions.
This subsection also notes that the defendant bears an evidential burden in
relation to the matters in this subsection.
Item 38 Subsection 40J(1) - definition of the offence provisions
This section is amended to refer to the section numbers of the new offence
provisions.
Item 39 Subsection 40K(1)
This item amends the text of subsection 40K(1) to reflect the fact that
section 40H is to be repealed from the Act.
Item 40 Paragraph 40K(1)(b) and (c)
This provision broadens the classes of people who can institute a
proceeding under the offence provisions to include people from countries in
relation to which a geographical indication (GI), translation of a
registered GI or traditional expression is registered.
Item 41 At the end of section 40K
This provision is necessary to implement item 40 as it defines a designated
foreign country in relation to which a geographical indication (GI),
registered translation of a GI, traditional expression or additional term
is registered on the Register of Protected Geographical Indications and
Other Terms.
Item 42 Subsection 40M(1)
This subsection is to be amended so that for wine originating in any
foreign country, any requirement in a national food standard in relation to
oenological practices or processes or compositional requirements is to be
replaced by the following:
. the oenological practices or processes, or compositional requirements
set out in the relevant prescribed wine-trading agreement as in force
or existing from time to time; or if accordance with such an
agreement, Australia has been notified of the authorization of
modifications of the oenological practices or processes, or
compositional requirements, set out in the agreement - the oenological
practices or processes, or compositional requirements, as so modified;
or
. The oenological practices or processes, or compositional requirements
prescribed by regulations in relation to wines originating in any
foreign country. The regulations must not prescribe oenological
practices or processes or compositional requirements unless they are
recognized by the laws and regulations of a foreign country. The
regulations may prescribe oenological practices or processes or
compositional requirements by applying, adopting or incorporating
(with or without modification) a written instrument or other document
as in force or existing at a particular time or as in force or
existing from time to time.
Item 43 Subsection 40M(2)
This subsection is to be amended as oenological practices and processes and
compositional requirements are the complete set of items for which the
Minister may suspend operations of the section.
Item 44 Paragraph 40P(1)(b)
This amendment provides the Geographical Indications Committee with the
power to determine conditions of use for Australian geographical
indications.
Item 45 At the end of paragraph 40P(1)(d)
This amendment provides the Geographical Indications Committee with the
following powers in accordance with applicable regulations.
. To deal with applications for the determination of geographical
indications (GIs) and translations of GIs in relation to regions and
localities in a foreign country and to make determinations of such GIs
and translations of GIs including determining any conditions of use
applicable to such GIs and translations of GIs; and
. to make determinations for the omission from the Register of Protected
Geographical Indications and Other Terms any registered GIs, and
registered translations of such GIs, in relation to a foreign country,
or region, or locality in a foreign country.
Item 46 Subsection 40PA(1) (note)
This amendment explains that geographical indications (GIs), and
translations of such GIs as they relate to wine originating in a foreign
country, are determined by the Geographical Indications Committee in
accordance with applicable regulations. This means that they are not
determined under this Division of the Act.
Item 47 At the end of Section 40PA
This amendment states that the operation of this Division of the Act may be
modified by changes to the applicable regulations. This will enable
Division 4 of the Act to be applied in such a manner as to ensure that
applications for and determinations of geographical indications, and
translations of those indications, as they relate to wines originating in
foreign countries can be dealt with in a manner consistent with Australia's
international obligations under regulations made with regard to subsection
40P(1)(ca).
Item 48 Section 40RB
This amendment ensures that this section of the Act is consistent with the
definition of geographical indication.
Item 49 Paragraph 40T(1)(b)
As the new definition of a geographical indication (GI) refers to the term
"indication" rather than merely "word or expression", this amendment is
necessary to ensure consistency with the new definition of the term GI.
Under the new definition of GI, a "word or expression" would be considered
an indication.
Item 50 At the end of subsection 40T(1)
This amendment provides the Geographical Indications Committee with the
power to determine conditions of use for geographical indications.
Item 51 Paragraph 40T(3)(b)
As the new definition of a geographical indication (GI) refers to the term
indication rather than merely word or expression, this amendment was
necessary to ensure consistency with the new definition of the term GI.
Under the new definition of GI, a word or expression would be considered an
indication.
Item 52 Division 4A of Part VIB (heading)
This amendment provides for a change of the heading for Division 4A so that
it accurately reflects the contents of the Division.
Item 53 At the end of subsection 40ZAA(1)
This amendment explains that geographical indications (GIs), and
translations of GIs as they relate to wine originating in a foreign
country, are not omitted under this Division of the Act. They are omitted
by the Geographical Indications Committee in accordance with applicable
regulations.
Item 54 At the end of section 40ZAA
This amendment states that the operation of this Division of the Act may be
modified by changes to the applicable regulations. This will enable
Division 4A to be applied in such a manner as to ensure that the
determination of removal of Australian geographical indications from the
Register of Protected Geographical Indications and Other Terms can be done
in a manner consistent with Australia's international obligations.
Item 55 After Division 4A of Part VIB
This amendment provides for regulations to be made that provide a process
to determine foreign country Geographical Indications (GIs) and
translations of those GIs. This amendment reflects the process for
determining Australian GIs in the Act and regulations.
Subsection 40ZAQ(1) provides for the regulations to make provision for the
determination of foreign country GIs and translations of those GIs.
Subsection 40 ZAQ(2) provides, through the regulations, the Geographical
Indications Committee (GIC) the power to:
. deal with applications for the determination of GIs and translations
of such GIs;
. make determinations of GIs, their translations and their conditions of
use;
. set out criteria for the Committee to use when it makes such
determinations; and
. provide for a review of such determinations by the Administrative
Appeals Tribunal.
Subsection 40ZAQ(3) provides the regulations the power to allow objections
to the Registrar of Trade Marks in relation to determination of foreign
country GIs and their translations and on what grounds such objections may
be made. This amendment states that the process for dealing with such
objections can be dealt with in the regulations.
This amendment also provides that the regulations will allow the Registrar
of Trade Marks to make recommendations to the GIC in relation to the
determination of proposed foreign country GIs and their translations.
Subsection 40ZAR provides for a process to appeal against decisions made by
the Registrar of Trade Marks. This appeal lies to the Federal Court, to the
exclusion of the jurisdiction of any other court except the High Court.
This is prescribed by regulations. This amendment also states what the
Federal Court may do upon hearing an appeal against a prescribed decision
and explicitly states that the Registrar of Trade Marks may appear and be
heard with regard to an appeal against such a decision.
40ZAS provides that if a decision is made by the Federal Court under 40ZAR
of the Act, or under the regulations, the Court's decision can not affect
rights under the Trade Marks Act.
40ZAT provides for the GIC to deal with and make determinations on
applications in relation to the omission of registered foreign country GIs
and translations of such GIs. In addition, this amendment provides for the
regulations to set out how such determinations may be made. Furthermore,
this amendment provides that the regulations may provide for the
Administrative Appeals Tribunal to review such determinations.
Item 56 Division 5 of Part VIB (heading)
This item renames the heading for the Division of Register of Protected
Names as the Register of Protected Geographical Indications and Other Terms
(the Register) to reflect that the Register will include geographical
indications (GIs), translations of GIs and other terms such as traditional
expressions, quality wine terms and additional terms.
Item 57 Subsection 40ZA(1)
This item provides the Registrar of Protected Names with a new title that
reflects the renaming of the Register of Protected Geographical Indications
and Other Terms.
Item 58 Paragraph 40ZB(a)
This item amends the functions of the Registrar of Protected Geographical
Indications and Other Terms to reflect the renaming of the Register of
Protected Geographical Indications and Other Terms.
Item 59 Paragraph 40ZB(b)
This item more accurately reflects the role of the Registrar of Protected
Geographical Indications and Other Terms.
Item 60 Paragraph 40ZB(e)
This item requires the Registrar of Protected Geographical Indications and
Other Terms, at the direction of the Geographical Indications Committee, to
advise relevant authorities and organisations in foreign countries of
changes to the Register of Protected Geographical Indications and Other
Terms. These changes may include when geographical indications (GIs),
translations of GIs and other terms such as traditional expressions,
quality wine terms and additional terms are included on the Register .
Item 61 Subsection 40ZC(1)
This item renames the Register of Protected Names as the Register of
Protected Geographical Indications and Other Terms (the Register) to
reflect that the Register will include geographical indications (GIs),
translations of GIs and other terms such as traditional expressions,
quality wine terms and additional terms.
Item 62 Subsections 40ZD(1) and (2)
This item updates the contents of the Register of Protected Geographical
Indications and Other Terms (the Register). Subsection 40ZD(1) sets out the
four parts of the Register.
Part 1 - Australian geographical indications (GIs), foreign country GIs and
translations of those GIs and any conditions of use applicable to those
indications.
Part 2 - Traditional expressions in relation to wines originating in a
foreign country and any conditions of use applicable to those indications.
Part 3 - Quality wine terms. These are terms that Australia would not
otherwise be able to use because they are traditional TEs and any
conditions of use applicable to those indications.
Part 4 - Other terms that are not GIs, translations of GIs, TEs or quality
wine terms and any conditions of use applicable to those indications. It is
proposed to enter the term methode champenoise in this part of the Register
as, under the Agreement, Australia has agreed to prevent this term from
being used in the description and presentation of wine unless the wine is
produced in Champagne using this method (as this term is a reference to a
method rather than the name of a geographic location it is not registered
as a GI. While it may be possible to rely on the false and misleading
provisions to prevent its use due to its similarity to 'Champagne' - a
registered GI - registering it under this part of the Register will ensure
certainty of prosecution).
The parts containing traditional expressions in relation to wines
manufactured in Australia and the names of varieties of grapes for use in
the manufacture of wines in Australia have been removed from the Register
as they are not required.
Subsection 40ZD(2) provides that geographical indications are to be entered
on the Register and describes what information will be included in Part 1
of the Register. The term Australian is to be deleted as the use of
adjectival forms of geographical indications is captured under the false
and misleading use provisions in Part VIB of the Act. The subsection
provides that Australian GIs, agreement country GIs and foreign country GIs
may be included on the Register.
Subsection 40ZD(2A) provides that traditional expressions are to be entered
on the Register for agreement countries and other foreign countries and
describes what information will be included in Part 2 of the Register.
Subsection 40ZD(2B) provides that quality wine terms for Australian wines
are to be entered on the Register and this will include conditions of use
and describes what information will be included in Part 3 of the Register.
Subsection 40ZD(2C) provides that additional terms in relation to
Australia, an agreement country and foreign countries are to be entered on
the Register and describes what information will be included in Part 4 of
the Register.
Item 63 Paragraph 40ZD(3)(a)
This amendment states that the operation of this Division of the Act may be
modified by changes to the applicable regulations. This will enable
Division 5 of the Act to be applied in such a manner as to ensure that
entries in the Register of Protected Geographical Indications and Other
Terms can be dealt with in a manner consistent with Australia's
international obligations.
Item 64 Clause 1 of the Schedule (definition of nominated member)
This item provides for an increase in membership of the Geographical
Indications Committee.
Item 65 Subclause 2(1) of the Schedule
This item provides for the Geographical Indications Committee to have other
than 3 members.
Item 66 At the end of subclause 2(1) of the Schedule
This item provides for the Australian Wine and Brandy Corporation
Regulations to specify additional members of the Geographical Indications
Committee (GIC). An increase of the membership size of the GIC is
considered desirable if it is to determine foreign geographical indications
(GIs) and registered translations of GIs.
Item 67 At the end of subclause 10(3) of the Schedule
This item provides for the Australian Wine and Brandy Corporation
Regulations to be able to prescribe a different quorum if the Geographical
Indications Committee has more than 3 members.
Item 68 At the end of subclause 10(7) of the Schedule
This item provides that the Australian Wine and Brandy Corporation
Regulations may prescribe a process for resolving questions in the event of
a deadlock.
Item 69 At the end of clause 10 of the Schedule
This item provides that the Australian Wine and Brandy Corporation
Regulations may require an increased quorum when more then 3 members are
appointed, and may make rules for the decision making process in such a
case.
Trade Marks Act 1995
Item 70 Section 6
This item is to be added for the purpose of formatting and clarity
following the introduction of Item 72.
Item 71 Section 6 (definition of geographical indication)
This amended definition of the term geographical indication brings the
definition in the Act closer to that stated in Article 3 of the Agreement
on Trade Related Aspects of Intellectual Property Rights.
A slightly different definition is being inserted into subsection 4(1) of
the AWBC Act reflecting the narrow focus of that Act.
Item 72 Section 6
This provides for a definition for the World Trade Organization (WTO),
referred to in the definition of terms such as country.
Item 73 At the end of section 6
A definition of country in subsection 6(2) of the Trade Marks Act is being
inserted to accord with the definition in subsection 4(1) of the AWBC Act.
It will state that for the purposes of the Act, a country includes a member
of the World Trade Organization (WTO). This definition will encompass WTO
members that are not countries in their own right such as the European
Community or Hong Kong.
Item 74 After paragraph 61(2)(a)
Paragraph 61(2)(aa) is being added so that an opposition will fail if the
geographical indication (GI) is not recognised in the country in which the
designated goods originate. The addition of this paragraph follows the
removal of this criterion as part of the definition of a GI to accord with
that in the Agreement on Trade Related Aspects of Intellectual Property
Rights. No change in outcome is intended.
Item 75 At the end of section 61 (before the notes)
Under the AWBC Act, a geographical indication (GI) cannot be used in the
description or presentation of a wine unless the wine originates in that
country, region or locality.
A number of GIs listed in the Register of Protected Geographical
Indications and Other Terms are common English words. Using such words,
even with their common English meaning, in the description and presentation
of wine could be an offence under the AWBC Act. For example, the use of the
registered GI 'Orange' in a trade mark 'Orange Roughy' in respect of wine
may not be allowable unless the wine originates in Orange NSW. This is even
though it would be unlikely to deceive or confuse members of the public as
to the origin of the wine.
Subsection 61(4) is being inserted to reflect subsection 40DA(2) of the
AWBC Act. It provides a new ground on which an opposition to the
registration of a trade mark will fail. This will be if the registered GI
is also a common English word and it is not being used in a manner likely
deceive or confuse members of the public as to the origin of the goods.
Also captured by this change will be the use of the word 'Port', with its
common English reference to a harbour. Australia has newly agreed that it
will no longer use 'Port' in the description and presentation of a style of
fortified wine. However, trade mark owners will be able to use 'Port' in
its common English meaning, for example 'Port Jackson shark' where
consumers would not be confused as to the origin of the goods.
Item 76 At the end of Subdivision A of Division 1 of Part 8
In agreeing to phase out wine terms Burgundy, Chablis, Champagne, Graves,
Manzanilla, Marsala, Moselle, Port, Sauterne, Sherry and White Burgundy,
the Government was aware that a small number of registered trade marks,
some dating back to 1906, include those terms. Use of these trade marks
after the phase out date may leave the trade mark owner open to prosecution
under the AWBC Act.
Subsection 83A(1) will enable the owner of a registered trade mark to
request an amendment to their trade mark or the particulars as they appear
on the Trade Marks Register in order to comply with the new obligations.
Subsection 83A(1) will apply to only a limited set of registered trade
marks; those where continued use of the trade mark on the registered goods
would be inconsistent with a new international obligations which did not
exist at the time the trade mark was registered.
Subsection 83A(2) will enable the registered trade mark owner to submit in
writing a request that the Registrar of Trade Marks amend either or both of
the following:
. part but not all of the of the trade mark;
. the particulars entered onto the Trade Marks Register.
by removing or substituting the newly prohibited term.
Subsection 83A(3) states the Registrar of Trade Marks must advertise the
request for amendment if he or she is proposing to make the amendment.
Subsection 83A(4) allows people to oppose the granting of the request to
amend a registered trade mark if they believe their own trade mark could be
adversely affected.
Subsection 83A(5) permits the Registrar of Trade Marks to grant the request
for the amendment if he or she is satisfied that the amendment is
reasonable. In determining whether the request is reasonable, the Registrar
must take into consideration:
. the extent to which the amendment relates to the inconsistency with
international obligations;
. whether the amendment involves replacing the existing term with
another term recognised by the relevant industry;
. the extent to which the grounds on which a person has opposed the
amendment has been established; and
. any other circumstances.
The intention is that the reasonableness test will not allow the Registrar
of Trade Marks to grant an amendment that would introduce a completely new
trade mark.
Under subsection 83A(6) the Registrar of Trade Marks may grant the request
for amendment even if the amendment may substantially affect the identity
of the mark or extend the rights of the trade mark owner.
Subsection 83A(7) provides that if the Registrar of Trade Marks is
satisfied the amendment requested under subsection 83A(2) should not be
granted then it need not be advertised. The Registrar of Trade Marks must
then refuse to grant the request.
Subsection 83A(8) provides that the registered owner or anyone who opposes
under subsection (4) may appeal to the Federal Court of Australia.
Part 2 - Application and transitional provisions
Item 77 Application of item 37
This item provides that the new provisions in relation to the protection of
geographical indications and other terms do not apply in relation to wine
that is sold, exported or imported before the commencement of Schedule 1.
The amendments do not apply to wine in transit to Australia on the
commencement date.
Item 78 Application of items 39 to 41
This item provides that the new provisions in relation to section 40K do
not apply before the commencement of Schedule 1.
Item 79 Application of items 44 and 50
This item provides that the new provisions in relation to section 40P(1)(b)
and 40T(1)(b) do not apply before the commencement of Schedule 1
Item 80 Appointment of Registrar unaffected
This item provides that the appointment of the Registrar of Protected Names
is not affected until Schedule 1 commences.
Item 81 Application of items 71, 74 and 75
Item 81 is an application provision. The amendments made by items 71, 74
and 75 apply to all applications for the registration of trade marks that
are made on or after the commencement of this item. The amendments made by
items 71, 74 and 75 also apply to applications that are pending on
commencement of this item.
The amendments made by items 71, 74 and 75 also apply to applications under
section 88 of the Trade Marks Act that are made on or after commencement of
this item in respect of trade marks registered before, on or after that
commencement. Section 88 of the Trade Marks Act relates to applications to
amend or cancel registered trade marks.
Item 82 Application of item 76
Item 82 is an application provision. The amendment made by item 76 will
apply to trade marks registered before, on or after commencement of this
item. Item 82 applies only to trade marks affected by international
obligations not in force at the time of their registration.
SCHEDULE 2: LABEL INTEGRITY PROGRAM
Part 1 - Amendments
Item 1 Subsection 4(1)
This item defines the meaning of blend in the context of the Act to be a
blend of wines from different vintages, varieties or geographical
indications (GIs). To be a blend at least one of the vintages, varieties or
GIs should be different between the wines.
Examples of a blend would include:
. A non-vintage sparkling wine in which grapes from the 2006 and 2007
vintages were used; or
. A wine blend of the grape varieties Shiraz and Viognier; or
. A Chardonnay blend of Chardonnay grapes from the Adelaide Hills,
Mornington Peninsula and McLaren Vale GIs.
Item 2 Subsection 4(1)
This item defines the term direct sale. The term direct sale means "a sale
of wine goods to a consumer" for the purpose of the Act.
This term is defined broadly in order to encompass a wide variety of
circumstances in which wine goods are sold to consumers.
For example, a direct sale could include but is not limited to:
. the sale of bottled wine at a retail outlet to a consumer;
. the sale of wine in bulk, vessels such as barrels, or other containers,
to a consumer; or
. the sale of bottled wine at a winery cellar door to a consumer.
Item 3 Subsection 4(1)
This item moves the definition of examinable document from Section 39C and
defines which documents need to be kept and are open to examination under
the Act for the purposes of the Label Integrity Program.
Item 4 Subsection 4(1)
This item moves the definition of grape extract from Section 39C to Section
4(1) to consolidate definitions in one place in the Act.
Item 5 Subsection 4(1)
This item moves the definition of inspection power from Section 39C to
Section 4(1) to consolidate definitions in one place in the Act.
Item 6 Subsection 4(1)
This item moves the definition of inspector from Section 39C to Section
4(1) to consolidate definitions in one place in the Act.
Item 7 Subsection 4(1)
This item inserts a definition of a label claim in relation to wine goods.
It is important to note that this is more than simply a reference to the
label on a bottle of wine. In the context of the Act, a label claim refers
to a written claim about the wine goods' vintage, variety, or geographical
indication (GI), including such a claim on a label, in a record that is
required to be kept under section 39F, in any other commercial document or
in an advertisement. The definition states that a label claim can be either
explicitly made, or implied. A written label claim includes electronic
forms.
Examples of label claims could be, but are not limited to, the examples
below:
. On a bottle of 2007, Barossa Valley, Shiraz, the label claims would be:
o 2007 as the vintage;
o Barossa Valley as the GI; and
o Shiraz as the variety.
. A contract between a winegrape grower and a wine maker would outline, for
example, the vintage, variety and GI of the wine good which is being
sold.
Item 8 Subsection 4(1)
This item defines a label law as a law in relation to Part VIA, Part VIB
and Part VII of the Act.
Item 9 Subsection 4(1)
This item moves the definition of label offence from Section 39C to Section
4(1) to consolidate definitions in one place in the Act. The definition is
expanded to detail the Parts of the Act (Part VIA, Part VIB, Part VII)
where a label offence can occur.
Item 10 Subsection 4(1)
The definition of manufacture ensures that making a blend is considered to
be manufacturing a wine.
Item 11 Subsection 4(1)
This item moves the definition of manufacturer from Section 39C to Section
4(1) to consolidate definitions in one place in the Act. The definition is
expanded to include an establishment where wine goods are processed,
modified or packaged.
Item 12 Subsection 4(1) (definition of originate)
This item broadens the scope of the definition of the term originate.
Whereas formerly, the definition only referred to wine, it now also
includes "or grape extract that is used or intended to be used in
manufacturing wine."
The broader definition provides coverage for the use of wine goods which
are not wine. For example, this definition will apply to items such as
grape juice, grape must and other extracts.
Item 13 Subsection 4(1)
This item moves the definition of package from Section 39C to Section 4(1)
to consolidate definitions in one place in the Act.
Item 14 Subsection 4(1)
This item provides a definition of a prescribed geographical indication
(GI) to be a GI identified in the AWBC Regulations that can be used for the
purpose of recording the origin of wine goods.
Item 15 Subsection 4(1)
This item moves the definition of principal employee from Section 39C to
Section 4(1) to consolidate definitions in one place in the Act.
Item 16 Subsection 4(1)
This definition defines a relevant agency for the purpose of the Australian
Wine and Brandy Corporation providing information for the collection of
levies or charges.
Item 17 Subsection 4(1)
This item moves the definition of variety from Section 39C to Section 4(1)
to consolidate definitions in one place in the Act. For example, Shiraz
winegrape juice would be obtained from the Shiraz grape variety.
Item 18 Subsection 4(1)
This item moves the definition of vintage from Section 39C to Section 4(1)
to consolidate definitions in one place in the Act. In the context of the
Act, vintage refers to the year in which wine grapes were harvested, or in
which the wine grapes from which wine or grape extracts were manufactured
or obtained were harvested. The meaning of year for the purpose of this
subsection is affected by the definition of harvest year in subsection
4(3), item 23 of this explanatory memorandum.
Item 19 Subsection 4(1)
This item moves the definition of wine goods from Section 39C to Section
4(1) to consolidate definitions in one place in the Act. The item broadens
the definition to cover grapes or grape extract used or intended to be used
in manufacturing wine.
Item 20 Subsection 4(1)
This item defines a wine label as a label which appears on a wine bottle or
any other container of wine. This applies to any writing which appears on a
label which is attached to a wine bottle or other package, the lid, cap or
cork of the vessel, or any writing which appears on the actual wine
package, including writing etched or moulded into the wine package.
Item 21 Subsection 4(1)
This item moves the definition of wine premises from Section 39C to Section
4(1) to consolidate definitions in one place in the Act.
Item 22 Subsection 4(1) - (at the end of the definition of year)
This item provides a note to the definition of year that indicates that the
definition of year does not apply to the definition of vintage which has a
specific meaning for the purposes of the Act.
Item 23 Before subsection 4(3)
This item identifies that grapes harvested in the second half of a calendar
year are to be regarded as being harvested in the following calendar year.
This picks up the possibility that very early ripening grapes may be
harvested prior to the commencement of the next calendar year and provides
for wine made from such grapes to be labelled with the vintage of the
following year.
Item 24 Section 5D
This item explains what is meant when the Australian Wine and Brandy
Corporation Act 1980 and of Trade Marks Regulations make reference to a
wine originating, for example, in a particular region.
Subsection 5D(a) states that a wine or grape extract intended to be used to
make wine originates in a country only if the wine or extract is made from
grapes grown in a territory of that country.
Subsection 5D(b) similarly provides that a wine or grape extract originates
in a region or locality of a country only if it is made from grapes grown
in that region or locality.
Item 25 Subsection 30(2)
This item removes the previous text and replaces it with the defined term
principal employee.
This item does not change the meaning of the clause in any substantial way.
Item 26 Subsection 30(3)
This item removes the previous text and replaces it with the defined term
principal employee.
This item does not change the meaning of the clause in any substantial way.
Item 27 Sections 39B to 39EA
Section 39B sets out to whom the Label Integrity Program applies, to
include
. record keepers by or through whom constitutional corporations or
partnerships carry out their business functions and activities; and
. record keepers who supply wine goods to certain constitutional
corporations or partnerships.
Section 39C provides the categories of people to whom the part applies. It
provides for regulations to be made to include or exclude classes of
persons if it is necessary to either provide for additional people to be
included if the wine supply chain changes, or for certain classes of
persons to be excluded as they should not be required to keep records. Part
VIA applies only to wine goods originating in Australia.
Item 28 Sections 39F to 39ZAAA
Subsection 39F(1) provides an obligation to keep written records and
details the information that the record keeper must keep. A person will
have to keep a number of records because the time requirements under
subsection 39F(2) will apply in relation to different events.
Subsection 39F(2) allows a person three days after the day that an event,
circumstance or state of affairs occurs to make a record for them to keep.
Each record must be kept for a period of seven years.
Subsection 39F(3) provides that a person who supplies wine goods must
provide a copy of the record kept under subsection 39F(1) to the person to
whom the wine goods are supplied. Under subsection 39F(4) the person to
whom the wine goods are supplied must keep a copy of the record for seven
years.
Section 39G provides circumstances where records are not required to be
kept.
Subsection 39G(1) provides that a wine grape grower is not required to keep
records in relation to the grapes grown by the grower.
Subsection 39G(2) provides that a person engaged in direct sales (a sale of
wine goods to a consumer) is not required to keep records of the person to
whom the direct sale was made but must record sales over the period, not
longer than one year, including details of the total quantity and the
vintage, variety and prescribed geographical indication of the wine goods
sold.
Section 39H provides the details that a record keeper is required to be
kept under section 39F. In particular, subsection 39H(3) provides that the
details required under paragraph 39F(1)(g) must be in a form that allows an
auditable trail to be readily traced and for details of all steps to be
readily checked. Details of blends of wines, or grape extract, derived from
grapes of different vintages, varieties or geographical indications must
show what proportion of the blend or wine goods are represented by each
blended wine or grapes and those proportions should total 100 per cent.
Section 39J creates three separate offences relating to the record-keeping
obligations specified under section 39F.
Subsection 39J(1) creates an offence for both failing to keep a record and
failing to keep a complete record in accordance with section 39F.
Subsection 39J(2) creates an offence to address the situation where a
person's label claim and records conflict, or the record kept by the person
is inadequate to support the person's label claim, because either the
record or the label claim has been falsified.
Subsection 39J(3) creates an offence for keeping a false or misleading
record. This provides for a situation where the record and the label claim
do not conflict because both of them have been falsified.
The penalty for record-keeping offences under section 39J is two years
imprisonment. This penalty has changed from the existing penalty under
section 39ZAAA of $15,000. Currently, there are no authoritative methods to
verify the vintage, variety or geographical indication of wine goods.
Therefore, in order to prove the commission of offences under sections 40C
and 40E (eg. that wine has been sold with a false or misleading description
or presentation) the prosecution relies heavily on the existence of
complete and accurate records that comply with section 39F.
If, for example, under the current offence provisions, a supplier of bulk
wine were to claim that wine produced from sultana grapes was derived from
chardonnay grapes, in order to attract a higher purchase price from their
customer, then, given the absence of objective analytical methods to
confirm varietal origin, the supplier would, were they to destroy, or fail
to make, accurate records, be in a position to frustrate investigation into
the validity of the label claim and be rendered liable only to the lesser
penalties applying to record keeping offences rather than those applying to
false label claims.
Therefore, the penalty for record-keeping offences under section 39J
includes a term of two years imprisonment, to remove the incentive for a
person to falsify, destroy or create inadequate records to avoid being
prosecuted under sections 40C or 40E. This penalty will assist in
maintaining the integrity of the regulatory regime.
Subsection 39K(1) provides that a person commits an offence if they fail to
provide a copy of a record in relation to the supply of wine goods. This
offence is intended to deter people from falsifying, destroying or creating
inadequate records, and to ensure records are consistent and accurate
throughout the supply chain.
Subsection 39K(2) provides that a person commits an offence if they fail to
keep a copy of a record in relation to the supply of wine goods. This
offence carries a penalty of two years imprisonment. Currently, there are
no authoritative methods to verify the vintage, variety or geographical
indication of wine goods. Therefore, in order to prove the commission of
offences under sections 40C and 40E (eg, that wine has been sold with a
false or misleading description or presentation) the prosecution relies
heavily on the existence of complete and accurate supply records that
comply with section 39F.
Failing to keep a record in relation to the supply of wine goods under
subsections 39K(1) and (2) is just as serious as failing to keep a record
under section 39J and this is reflected in the penalty for this offence.
Like section 39J, subsections 39K (1) and (2) will remove the incentive for
a person to falsify, destroy or create inadequate supply records to avoid
being prosecuted under sections 40C or 40E. This penalty will assist in
maintaining the integrity of the regulatory regime.
Section 39L provides that a prosecution may be brought within seven years
(the period for which records are required to be kept).
Section 39M extends the current section 39ZAAA(2) to grape extract as well
as wine.
Item 29 Subsection 39ZAA(1)
Subparagraph 39ZAA(1)(a) allows the Australian Wine and Brandy Corporation
(AWBC) to require a person whose name and address appears on a wine label
as the supplier of the wine (within the meaning of the Australian New
Zealand Food Standards Code) to provide specified information in relation
to records required to be kept under Part VIA Division 2. For example, it
will enable the AWBC to obtain information regarding the manufacturing
process for wine where a person's name appears on the label but that person
does not receive or supply wine goods or take any steps that change or
affect the wine goods and therefore is not required to keep written records
under subsection 39F(1).
Item 30 Section 39ZAB
This item provides that a person commits an offence if they fail to or
refuse to comply with a section 39ZAA notice. This item is important
because without this information the Australian Wine and Brandy Corporation
(AWBC) may be unable to identify the wine manufacturer and verify label
claims. For example, there are people who market and sell wine under their
own label but who have no involvement in the process. Their name will
appear on a label and the only way for the AWBC to identify the wine
manufacturer is through obtaining information from the person on the wine
label. Therefore, for the system to work it is essential that this person
supplies the requested information.
The penalty for failure to comply with section 39ZAA notice is two years
imprisonment. The reason for this significant penalty is to match the
penalties that apply for breaches of sections 39J, 39K, 40C and 40E,
thereby removing an incentive for a person to fail to comply with a section
39ZAA notice in order to avoid being prosecuted under sections 39J, 39K,
40C or 40E.
Item 31 Paragraph 39ZB(2)(b)
This is a minor amendment required because the term approved defined in
section 39C of the Act to mean approved by the Australian Wine and Brandy
Corporation in writing will be repealed by item 27.
Item 32 Paragraph 39ZJ(1)(c)
This item is necessary to allow the Australian Wine and Brandy Corporation
to give information obtained under Part VIA to a person who is prosecuting
(or proposing to prosecute) or taking (or proposing to take) other
proceedings against, a person under sections 39J and 39K.
Item 33 Subsections 39ZL(1A) and (2)
This item provides that the Australian Wine and Brandy Corporation may,
with a person's consent provide information it obtained under Part VIA to a
relevant agency. subsection 39(4) provides that a relevant agency is an
agency under the Public Service Act 1999 with responsibility for levies.
Item 34 Section 40ZF
This item provides that the provisions of the Australian Wine and Brandy
Corporation Act 1980 relating to inspections that are set out in Division 4
of Part VIA also apply to Division 3.
Item 35 Subsection 44(2)
This item provides that the provisions of the Australian Wine and Brandy
Corporation Act 1980 relating to inspections that are set out in Division 4
of Part VIA also apply to section 44.
Part 2 - Application and transitional provisions
Item 36 Application of amendments
Part 1 of the item provides that the Label Integrity Program records
required under section 39F of the Australian Wine and Brandy Corporation
Act 1980 are to be kept after the Schedule commences.
Part 2 of the item provides that the provisions in force before the
commencement of the Schedule continue to apply after the amendments take
effect.
Item 37 Preservation of instruments
The item provides that instruments in force at the commencement of the
Schedule and identified in the item continue.
Schedule 3 - Compliance
Part 1 - Main amendments
Item 1 Section 9
This item is repealed as the Australian Wine and Brandy Corporation has not
and does not approve carriers of grapes and does not determine contracts
for the carriage of grape products.
Item 2 At the end of section 39A
The amendments inserts a note that advises that under section 44AB an
injunction can be sought for a person engaging in conduct in breach of the
Label Integrity Program.
Item 3 Subsection 39ZB(3) (penalty)
This change modernises the penalty provision by expressing it in penalty
units.
Item 4 At the end of section 39ZC
The amendments inserts a note that note clarifies the parts of the Act
under which an inspector may exercise their powers.
Item 5 At the end of subsection 39ZD(1)
The note explains when an inspector may apply for a warrant.
Item 6 Section 39ZE
The amendment provides for inspectors to secure evidence, pending a warrant
application, where an inspector enters wine premises with the consent of
the wine manufacturer, even when the consent is subsequently withdrawn.
Item 7 At the end of Subsection 39ZF(1)
The amendment inserts a note that clarifies how and when an inspector may
apply for a warrant.
Item 8 Section 39ZH
This amendment removes a reasonable excuse as a reason for not providing
documents to an inspector. It retains the right of a person to refuse or
fail to answer a question or produce a document if answering the question
or producing the document would tend to incriminate the person.
The amendment also modernises the penalty.
Section 39ZI provides for an inspector to obtain a search warrant by
telephone or other means. It is drafted in accordance with Section 3R of
the Crimes Act 1914 which provides a model for such offences.
Section 39ZIA provides offences in relation to the obtaining of warrants by
telephone or other electronic means. It is drafted in accordance with
section 3ZU of the Crimes Act 1914 which provides a model for such
offences.
Item 9 Subsection 39ZJ(1)
This amendment removes a reference to section 42 which is being repealed.
Item 10 Subsection 39ZL(1A)
This amendment removes a reference to section 42 which is being repealed.
Item 11 At the end of section 40A
This amendment advises that injunctions can be obtained for actions that
contravene this Part of the Act.
Item 12 Section 40L
This section is repealed because a single injunctions power is included in
Section 44AB.
Item 13 Section 42
This section is repealed as it has not been used by the Australian Wine and
Brandy Corporation.
Item 14 Subsections 44(1) and (1A)
This amendment provides that the export of grape products in contravention
of the regulations is an offence for which the penalty is imprisonment for
six months.
Item 15 After section 44AA
This amendment provides a single source of injunctions power in the Act.
Subsection 44AB(1) sets out the circumstances in which an injunction can be
sought.
Subsection 44AB(2) provides that an injunction can be made to restrain a
person from doing an act or require a person to do an act.
Subsection 44AB(3) provides who may seek an injunction. It does not amend
the list of who may apply for an injunction from the list in the previous
section 40L. However, Item 18 of these amendments does extend this list
once Schedule 1 of these amendments commences. Item 18 provides that the
following persons may apply for an injunction:
. manufacturers of wine from foreign countries;
. grape growers from foreign countries or
. organisations of foreign countries that have a registered geographical
indication or registered traditional expression.
Subsection 44AB(4)- 44AB(7) provide rules for the injunctions and do not
amend the rules in the previous section 40L.
Item 16 Subparagraph 46(1)(h)(i)
This amendment modifies the penalty that may be imposed in regulations made
under the Act by expressing it in penalty units.
Item 17 Subparagraph 46(1)(h)(ii)
This amendment modifies the penalty that may be imposed in regulations made
under the Act by expressing it in penalty units.
Part 2 - Amendment contingent on the commencement of Schedule 1 to this Act
Item18 Paragraphs 44AB(3)(d) and (e)
This amendment provides that following commencement of Schedule 1
manufacturers of wine or grape growers from foreign countries or
organisations of foreign countries that have a registered geographical
indication or registered traditional expression may apply for an
injunction.
Part 3 - Application and transitional provisions
Item 19 Preservation of injunctions
This item provides that injunctions in force when Part 3 commences under
section 40L of the Act will continue.
Item 20 Application of item 14
This amendment provides that the offence of exporting grape products (Item
14) in contravention of the regulations commences when Part 3 commences.
Item 21 Application of item 15
This amendment provides that the extended injunctions section (Item 15)
does not apply to conduct engaged in before the commencement of Part 3.
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[1] AWBC Winefacts, "Australian Winegrape Prices & Tonnes Crushed".