Tariff confusion

Simon Power last year promised to continue New Zealand's freeze on unilateral tariff reductions; National opposed Sir Roger's bill to zero rate all tariffs.

And here's just one of the ways in which we're all benefited by National's love for the tariff status quo.

A couple of months ago, Luke Nicholas, brewer of Epic's fine line of hoppy ales, dropped me a note asking what I knew about some new tariff on the glass bottles he was using. His imported bottles jumped in price substantially. So I checked into the working tariff document - nothing new there. I emailed a couple folks in Treasury, who checked with folks in Customs. Nope, nothing there. I was wondering whether Luke somehow got hit by the voluntary environmental glass levy that I'd heard something about. Luke thought it was some play intended to hit a distiller who'd secured a big lot of cheap imported bottles destined for the ready-to-drink market.

Roger Kerr finally figured it out for me after consulting with the Ministry of Economic Development. It turns out that the tariff had never changed but it had been temporarily abated. In 2007, New Zealand's sole manufacturer of glass containers had to do some furnace upgrades that weren't set to be completed until 2009. The company agreed to a temporary tariff concession for glass products of Tariff heading 70.10. The concession was extended until September 2010 when the bottling plant was back to full strength. With the domestic producer again up to full capacity, the tariff was put back in place.

Luke, who only started bottling a few years ago, didn't know he was operating under the temporary benevolence of MED. It's really his own fault for not reading the Gazette where such changes are duly notified. As far as the little guys are concerned, the regs might as well be posted in the basement of the local planning office in a locked filing cabinet in a disused lavatory behind a door saying "Beware of the tiger".

I suppose we should at least be thankful that there was tariff abatement during the interval in which the local manufacturer was unable to supply the market. The local manufacturer, as far as the small brewers of boutique beers are concerned, continues to be unable to supply the market unless you want large lots of the standard DB bottle. But hey, small and temporary mercies.

Glass tariffs in New Zealand protect one manufacturer at the expense of everybody in the country who uses glass. Perhaps every toast raised in the next year ought finish with a curse upon the glass tariff.