Last week Annapurna Estate owner Ezio Minutello said the carbon tax had played a part in his decision to pull out his vines and sell more than half his land.

The Tawonga South grape grower said natural disasters, the carbon tax and declining visitation all played a part in his decision.

But a spokeswoman for the department said Mr Minutello was mistaken about the impact the carbon tax would have on growers.

“The carbon price mechanism will only apply to around 500 large emitters of greenhouse gases — these are big industrial concerns like power stations, steel mills, aluminium smelters and coalmines,” she said.

The spokeswoman said agricultural emissions would be exempt.

“This means a winery like Annapurna Estate will not have any direct liability under the carbon price mechanism,” she said.

But she admitted winemakers may face cost increases due to the impact of the carbon tax on such things as electricity prices.

She pointed to Australian Bureau of Agriculture and Resource Economics and Sciences modelling that the carbon tax impact on total on-farm input costs for wheat, and some other crops, would be an increase of just 0.07 per cent.

But Mr Minutello said that the flow-on effect would be much more serious.

“Even in the product we’re buying now they’re charging a carbon component on it,” he said.

“It’s more than 0.07, that’s for sure.

“The minister needs to get outside and actually see what’s going on.”

Mr Minutello said his suppliers would all pass on the cost of the carbon tax.

“Packaging, electricity, chemicals, you name it, it’s straight across the board,” he said.

“It is in absolutely everything, to me it’s just another form of GST.”

The Climate Change spokeswoman said to help reduce costs, winemakers could seek handouts under the federal government’s clean technology food and foundries investment program.

This program has $200 million to spend helping businesses install more energy efficient equipment.

She also said the federal government’s carbon farming initiative allows farmers and land managers to earn extra revenue by selling carbon credits — if they store carbon on the land or reduce their emissions.