Government will not add to wine sectors headache

Government will not add to wine sector's headache

Australia's Government has rejected calls for tax rises on wine in order to curb excess drinking by forcing up prices.

Taxes on wine will be left untouched with the existing Wine Equalisation Tax (WET) favoured over the volumetric system used for packaged beer, the Government said yesterday (3 May).

Its response follows a wide-ranging tax review, named the Henry Review, commissioned by ministers.

Winemakers’ Federation of Australia CEO, Stephen Strachan, welcomed the Government's decision.

"Our modelling shows that taxing wine in the same way as packaged beer and removing the WET Rebate would see 95% of wine increase in price, sales volumes fall by 34%, 29,000 hectares of vineyard become redundant and about 12,000 jobs lost," said Strachan.

Wine is produced, marketed and consumed differently from other alcohol and should be taxed accordingly, the WFA said. “Wine is usually drunk in moderation by older adults and most commonly with food,” Strachan said.