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AUS: 300% beer, wine tax hike on Australian horizon?

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Following a 70% tax hike on the ready-to-drink category (RTDs) in Australia, an even higher increase on beer and wine duties is thought to be in the pipeline.

The Government, led by Labour Prime Minister Kevin Rudd, is speculated to be preparing a 300% tax rise on beers and wines. The tax hike would follow the Rudd government's decision to increase duties on RTDs last month by 70%, and comes soon after analysts' claims that the RTD tax would only benefit the brewing industry.

The speculated 300% tax hike has come as a shock to Australia's domestic beer and wine industries, with the microbrewing sector being the most vociferous opponent of the tax increase.

"This tax comes on top of 50% excise already paid per carton and makes it almost impossible to survive for most in the micro industry," said Snowy Mountains Brewery director and founder Kevin O'Neill yesterday (7 May).

The move is intended to curb Australia's binge drinking issues, but critics are sceptical. According to Snowy Mountains' O'Neill, Australian beer consumption is at its lowest since 1961. "If the reason they have proposed this tax is to stem binge drinking, then why forecast a figure of A$2bn ($1.9bn) in revenue raised in four years at current drinking levels? It is transparent that the real reason for this proposal is as  a revenue raising exercise," O'Neill claimed.


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