Australian wine lobby slams study into higher taxes on cheap alcohol
The peak body for winemakers has slammed a Monash University study that found higher taxes on cheap alcohol could be key to reducing consumption.
Researchers wanted to compare the effect of a floor price on alcohol and a per-unit tax of $1 per standard drink on consumption levels.
The study tracked the alcohol consumption habits of 885 Victorian households, concluding that higher taxes on cheap alcohol could cut an individual's consumption by 11.9 standard drinks a week.
A key finding of the study was that a 'minimum unit price' was a more effective tool in reducing consumption than taxing each standard drink.
The authors said policies that increase the cost of the cheapest alcohol, which is often wine and cider, were an effective way to reduce consumption, without unfairly impacting low income consumers.
But the Winemakers Federation of Australia has rejected the study's findings, arguing that raising the price of cheap wine would simply shift problem drinkers to other alcoholic beverages or illicit substances.
It said cask wine, one of the lowest taxed alcoholic products, was more likely to be consumed by elderly people on fixed incomes, while full strength beer was the most abused category for young drinkers.
Chief executive Paul Evans said the wine industry needed its own tax regime, due to the fundamental difference between wine production and the beer and spirits industries.
"We are predominantly a small and medium sized business sector, we are predominantly agriculture and we are suffering from low profitability," Mr Evans said.
"All of these issues are different to the beer industry, which is dominated by two major multinationals, and the spirits industry which is dominated by a handful of foreign multinationals."
In Australia, cheap cask wine is also produced by large companies, but Mr Evans said raising taxes on these products would still hurt smaller, local players.
Wine and cider are taxed as proportion of retail value, under a regime called the Wine Equalisation Tax.
Beer, wine, and spirits fall under a multitude of different tax levels, and products like ginger beer will change from being classified as a "ready to drink" product to a "fruit or vegetable wine" as its alcohol content rises.
Some cheap wines, like cask wine, attract as little as four cents a standard drink, compared with a standard strength beer with attracts around 46 cents a standard drink.
