Reports from New Zealand claim that producers are taking advantage of the new levy of alcohol tax by increasing the prices of both beer and spirits by more than the new tax.

To account for inflation the annual increase of excise tax goes up from today by 3.1% according to a report by the New Zealand Herald newspaper. However, the report also claims that prices are likely to go up by more than this for many drinks as the liquor industry takes the opportunity to pass on other price rises.

Chief executive of the Distilled Spirits Association, Thomas Chin told the Herald that raising excise taxes on ordinary spirit drinkers was unlikely to increase the government's revenue base, especially in a "generally declining market".

He continued to say that if only the tax increase was passed on, the price of a bottle of spirits would increase by NZ$0.50 (US$0.21). But an average bottle of spirits which has been selling for just under NZ$25 would probably go up by NZ$1.