AUS: RTD tax rise crashes after Senate vote

By just-drinks.com editorial team | 18 March 2009

Australia's tax hike on RTDs lays in tatters today (18 March), after a vote on the increase in the country's Senate.

In April last year, the Government introduced a 70% rise in the tax rate of RTDs, in an attempt to improve public health and cut young peoples' alcohol consumption.

But a vote in the Senate yesterday saw the move defeated, with 32 votes against beating the 31 in favour.

Distillers are now expected to receive in the region of A$300m (US$203.4m) after the defeat, with the price of RTDs expected to drop to their previous level, falling by between A$0.30 and A$1.30 per bottle.

In a report from Australian Associated Press, a spokesperson for the country's Distilled Spirits Industry Council said: "The senators who made the right decision in rejecting the Government's tax grab on RTDs realised that a tax was not a solution to problem drinking."

In January, Fortune Brands said that the RTD tax rise had played a significant part in a 16% drop in fourth quarter sales at its spirits arm, Beam Global Spirits & Wine.

Sectors: Beer & cider, Spirits, Wine

Companies: Fortune Brands, Beam Global