Wine Marlborough deputy chairman Simon Bishell says Labour's plan to charge irrigators threatens the viability of the New Zealand wine industry.

A Marlborough grapegrower has blasted Labour's irrigation policy as "dangerous" and "deceitful".

Wine Marlborough deputy chairman Simon Bishell said it was populist electioneering that would "drive a deeper wedge between the rural and urban divide".

The Caythorpe Family Estate grower said international wine markets were incredibly competitive and any extra charge would put New Zealand exporters at a disadvantage.

But the local Labour candidate and environmentalists say the wine industry is using a public good to make a profit and they, and other industries using water, should pay.

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The "Clean Water for Future Generations" policy was met with immediate backlash from the primary sector after new Labour leader Jacinda Ardern announced it last week.

The policy included a royalty on bottled water based on a per-litre rate, as well as a royalty on irrigation water for every 1000 litres, or cubic metre, used.

Ardern said that, should her party be in a position to form a government after the election, she would meet with all affected sectors to set fair and proportionate rates.

Labour's finance spokesman Grant Robertson said on Saturday the likely rate for irrigators would be between 1 or 2 cents per 1000 litres.

The royalties, or charges, collected under the policy would be distributed back to the regional councils in the area they were collected and used to clean up rivers and waterways.

However, Bishell said it was "insane" to come out with the policy without figures, something he said had created uncertainty and suspicion in the primary sector.

"If it is not going to be significant then why don't they tell us? They're not telling us because they know it will be unpalatable," he said.

The grapegrower made the comments before Robertson put a figure on the charge, however he did say any cost would be unacceptable.

Bishell said on average growers used between 10 and 12 cubic metres of water per hectare a day from late November to early February.

However, even if the charge was a small one, he said it was still unacceptable and could put the $1.6 billion industry at risk.

"If we try and increase the price in the market there's 50 other producers queuing up to take our place. Consumers will just say 'no thanks'."

Bishell said he had been fielding calls from concerned growers since the policy was announced, adding many in the industry were fired up by the idea of paying a royalty.

"I need to make it clear, we're not against protecting the environment and cleaning up the rivers - I want my children to be able to swim in them too," he said.

"But by applying a blanket tax across all users they are essentially saying all farmers are polluters, which is ludicrous."

Labour candidate for Kaikoura, Janette Walker, said Ardern made it very clear the rate for irrigation would be set in consultation with the affected industries.

Walker rejected the idea the wine industry would lose its competitive edge internationally if the policy was introduced, citing how little water they actually used.

Using Robertson's figures and a maximum irrigation rate of 20 cubic metres a hectare each day, Walker said viticulturists would only pay between $12 and $24 a hectare in total over two months.

"I don't think they should find that cost onerous - we're not talking hundreds of dollars per hectare," she said.

"I think the wine industry fell into the trap of accepting what Nick Smith was saying, which was incorrect. He conflated the impact to suit himself, he's scaremongering."

Walker said a rule in the proposed Marlborough Environment Plan, called enhanced water transfer, allowed permit holders in Marlborough to trade, or potentially sell, unused allocations.

"Nobody complained about that, they're more than happy to have a value put on water because some of these large water consent holders stand to benefit from trading," she said.

"So they're happy to have a value put on water when they're getting the coin in their pocket, but the fact is we've got to do something about environmental issues."

Council environmental policy manager Pere Hawes said the rule addressed the issue of new or existing users gaining access to water if the resource was fully allocated.

Monitoring showed sometimes permit holders did not use their full allocation, and that water could be used productively elsewhere, Hawes said.

Currently permit holders could apply to transfer permits through a consenting process, something he said did not allow the transfer of water at short notice.

Forrest & Bird top of the south regional manager Debs Martin said the organisation supported water pricing, but said it was a complex issue that needed extensive community consultation.

"Our rivers, our aquifers, they're public goods, they provide all sorts of things to the community, and as soon as anyone extracts that water they are denying that use for the public," she said.

Martin said charging for water would make people use it more efficiently, adding she was not surprised the wine industry wanted to avoid an extra cost.

"The water going onto those grapes is growing wine they're selling at a profit, so they're using something that is a public good that's owned by the public to make a profit and they should pay for it."

Kaikoura MP Stuart Smith, a former chairman of New Zealand Winegrowers, said Labour's policy would have a negative impact on Marlborough.

"Marlborough is the country's largest winegrowing region, and is at the forefront of New Zealand's wine industry growth. This tax would recklessly put a vital sector of our local economy at risk," he said.

"And the increased costs of producing goods like milk, fruit and vegetables would just be pushed onto our hard-working families.

"If the justification is to clean up the rivers, why aren't urban users paying for it, because in Marlborough's case the worse river is the Taylor and that's from mainly urban causes."

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