Wine tax stoush follows floor price win

Winemakers and distillers have welcomed the Australian National Preventive Health Agency's decision to reject minimum pricing on packaged liquor as a policy option, but the two groups remain at loggerheads over recommendations for volumetric-based taxation.

Tasked by the Federal Government to examine and advise on the public interest case for a minimum (floor) price for alcohol, the ANPHA yesterday ruled such a policy should not be introduced nationally at this time.

"Use of such a measure should continue to be considered, where it can be effective, in more local circumstances in Australia," ANPHA said.

But the agency said that the majority of submissions it received arguing for alcohol-related taxation reform proposed that taxes should be volumetric, that is, based on the alcohol content of the beverage.

"Wine however is taxed on value – the cheaper the wine, the less the tax, irrespective of the alcohol content," ANPHA said.

"Based on public health considerations, the Agency finds that the current operation of the Wine Equalisation Tax is of concern and requires reappraisal."

Winemakers' Federation of Australia (WFA) chief executive Paul Evans responded that the evidence is unclear on whether price has any significant impact on the drinking behaviours of binge drinkers.

"What is clear is that moderate drinkers and the regional communities supported by a viable wine industry would be penalised," he said.

But Distilled Spirits Industry Council of Australia (DSICA) spokesman Steven Riden welcomed ANPHA's recommendation for wine to be taxed on the same basis as beer and spirits as "the most sensible course".

"Bringing wine into the excise tax system and taxing it on the volume of alcohol will end discrimination between drinkers of different products, which sees distilled spirits drinkers paying 14 times more alcohol tax than cask wine drinkers," Riden said.

Source: The Shout, 2 November 2012