Has your favourite drink been hit with an unfair 70% tax increase?
ALCO TAX RIP-OFF
What the Media are saying...
The Australian 6/11/2008 - page: 3
Alcopops revenue overestimated
by $lbn
WAYNE Swan will have to start weaning himself off the revenue flowing from grog, after Treasury acknowledged yesterday it overestimated income from the alcopops tax hike by almost $1 billion over two years.
But increased tax takes from beer, full-strength spirits and wine will cushion the impact on the budget, as drinkers switch beverages to avoid the alcopops price increase.
The 2008-09 mid-year economic and fiscal outlook shows the Government has drastically reduced the expected revenue from the alcopops tax, which was increased by 70 per cent in the budget. It had predicted in May the tax would return $3.1 billion over five years.
It now expects the measure announced in April this year to raise $990 million in 2008-09 and $1.1 billion in 2009-10, down $440 million and $510 million respectively on budget estimates. No figures were given for 2010-11 or 2011-12.
The revision follows a report in The Australian on Monday showing revenue would be sharply lower.
"Since budget, there has also been a significant fall in production of ready-to-drink beverages following an increase in their excise rate, which is only partly offset by a substitution towards domestically produced and imported spirits and other excisable alcoholic beverages," Treasury's mid-year outlook states.
The substitution effect will help drive up tax takes on full-strength spirits by 10.5 per cent in 2008-09 and 15.8 per cent in 2009-10, adding $50 million more to Treasury coffers than anticipated in the budget. Revenue from low-taxed beer will rise by 2.6 to 3.6 per cent over the period, up $120 million across the two years on May's forecasts. Treasury's forecast take from its tax on wine has also increased, by $30 million, over the same period.
Its earnings from duties on "excise-like goods" which count imported alcohol as a major (but not sole) component are tipped to rise by $210 million across 2008-09 and 2009-10.
The Australian 4/11/2008 - page: 2
Alcopop revenue hopes cut in half
THE increase in the tax on alcopops will deliver barely half of the extra revenue the Rudd Government expected, according to data in a leaked Treasury executive minute.
Analysis of publicly available data and the leaked minute shows the alcopops tax rise will deliver only $350 million extra to government coffers over the next four years, significantly less than the $680 million estimated
The Government expected the tax to deliver $3.1 billion over four years after the 70 per cent rise in excise on ready-to-drink beverages announced in May's budget. Government figures also suggest the measure, touted as part of a crackdown on binge drinking, may be driving consumers to full-strength spirits.
Under the change, the tax on RTDs is to be increased to the full-strength spirits rate of $66.67 per litre of alcohol. The tax is already being collected, although the legislation putting it in place is yet to pass through the Senate.
The Coalition has opposed the measure, while Family First's Steve Fielding has announced that he will support the tax increase, given the global financial crisis and uncertainty over its impact on the budget position.
This leaves the future of the proposal with independent senator Nick Xenophon, who told The Australian he remained open to the idea of the tax increase but was concerned with the projections.
"It seems the Government was intoxicated with the thought of raking in $3.1 billion in taxes but has now woken up with one almighty fiscal hangover," Senator Xenophon said. The figures obtained by The Australian point to a shortfall of $98.7 million in RTD excise for the May-June period of this year, a percentage decline of 46 per cent.
The shortfall roughly correlates with a 42 per cent decline in RTD sales figures recorded by the Liquor Merchants Association of Australia sales service between May and September this year when compared with the same period last year.
When the trend is applied over four years, the Government would collect only $350 million in additional excise from RTD sales.
While RTD consumption has dropped, a rise in revenue from full-strength bottled spirits suggests some RTD consumers may have turned to more potent drinks.
The Australian 3/08/2008 - page: 5
THE government agency whose statistics the Government used to justify its alcopops tax has made public its own doubts about the products' link to binge drinking.
The Australian Institute of Health and Welfare yesterday embarrassed the Government in a submission to a Senate inquiry into alcopops when it said consumption trends for ready-todrink alcohol among under-18s were "unclear".
"Given the stable prevalence of risky drinking, and the lack of any clear trend regarding preferences for RTDs, the increased availability of RTDs does not appear to have directly contributed to an increase in risky alcohol consumption," it said.
The summary of the submission represents the biggest blow yet to the Government's defence of the tax hike on health grounds, since it comes from its peak agency for health statistics within Health Minister Nicola Roxon's own portfolio.
When the excise was increased by 70 per cent in late April, Ms Roxon cited AIHW data heavily when making her case that the measure would cut binge-drinking rates among teenage girls.
She also estimated the decision would return about $2 billion to Treasury. Two weeks later, budget papers put the tax take at $3.1 billion.
In the battle of statistics that followed, industry used its sales and research data to challenge Treasury's modelling and Ms Roxon's interpretations of the AIHW research. But this marks the first time the AIHW has weighed into the debate. It notes a "modest increase" in apparent consumption of alcopops in the past five years, but attributes it mostly to older age groups.
From 2001 to last year, "there has been virtually no change in the pattern of risky drinking among young Australians".
But Ms Roxon last night pointed to other submissions in support of the tax hike. "These same figures show that almost 20,000 young girls, aged 15 and younger, drink daily or weekly. By any measure, that is unacceptable," she said.
The Australian 23/07/2008
http://www.theaustralian.news.com.au/
PM's alcopop tax helps fuel inflation
KEVIN Rudd's tax binge on alcopop sales is delivering a hit to inflation, according to today's CPI figures.
The measure was billed as the antidote to teen binge drinking. But today's figures suggest it is also fuelling inflation, delivering the biggest hit to the price of spirits since the 1980s.
The Australian Bureau of Statistics’ latest CPI report notes the increase in the price of spirits – 6.1 per cent in the June quarter – “was predominantly due to the introduction of an increased tax on all pre-mixed spirits from 27 April 2008”.
The Coalition has criticised the tax grab as a misleading stunt, arguing it is a hit on "men in utes" who enjoy ready-to-drink alcoholic drinks, rather than a crackdown on teenage girls who binge on fizzy alcopops.
Opposition Treasury spokesman Malcolm Turnbull said today the figures undermined the Prime Minister's claim to an inflation-fighting budget. "Far from fighting inflation, the budget has failed to assist the Reserve Bank in keeping inflationary pressures in check,” he said. "Upcoming increases in the luxury car tax and changes to the Medicare levy surcharge will further increase pressure on the CPI.”
Mr Turnbull said the Coalition had "every confidence that the Reserve Bank will manage the inflation problem we confront, much of which is generated by external factors such as increases in the price of fuel". "But today’s CPI confirms our description of the budget as one which, far from placing downwards pressure on inflation, as Mr Swan claimed, has in fact by increasing prices added to inflationary pressure. "And now, into this mix, the Government wants to rush through a poorly designed and implemented ETS (emissions trading scheme) which will put further pressure on inflation.”
Treasurer Wayne Swan said today’s figures showed that Australia's substantial inflation problem had been made worse by skyrocketing oil prices and the global financial crisis. "Australia is facing the most difficult global economic conditions in a generation and inflation is a major part of that challenge,” he said. "The CPI rose by 1.5 per cent in the June quarter, driving the annual rate higher to 4.5 per cent. Excluding the impact of the GST, inflation is running at the highest rate since the December quarter 1995.”
Mr Swan noted that the price of deposit and loan facilities also rose strongly in the quarter, up 9.5 per cent to be 16.2 per cent higher over the year. "The rise has been driven by tighter credit conditions arising from the global financial crisis, as well as an ABS correction for underestimation in previous quarters,” he said.
Adelaide Advertiser 18/07/2008 - Page: 18
Beware
consequences of
'alco-flop' tax
THE Government's 70 per cent tax hike trial on pre-mixed alcoholic drinks is an alco-flop - a tax experiment thinly disguised as a health measure. As the latter, it is failing - consumers, publicans, major retailers, police and health authorities know it, and certainly the industry knows it.
As a father of two teenage children and as a former policeman, I am very concerned about the incidence of problem drinking. The Government's own data shows there is no "epidemic" of problem drinking among our youth.But I don't think we should become complacent, even if the statistics show that the problem is not worsening. We simply have too many people drinking to get drunk.
The alcohol industry needs to continue working, together with government and others, to educate our young - and older - consumers about moderate drinking.
The causes of alcohol misuse are many and varied. It is a complex social and cultural issue. There is no single solution. But right now, the Government's narrow tax on pre-mixed drinks is causing more problems than it is fixing. Consumers are being put at increased risk as they are guessing how much to pour into a glass; a benefit of pre-mixed drinks is that they contain measured, known quantities of alcohol. Young girls are back to being exposed to drink spiking, as they have no control over open drinks mixed for them at parties or bars.
So far, the tax hike is having quite a shocking impact - none of which was anticipated by government. There is a way out of this. There is a way to stop the substitution of relatively low-alcohol, ready-to-drink products with bottles of spirits, cheaper beer and low-cost but stronger wine-based drinks.
The Government just needs to take stock of the situation and look at the facts. It can overturn the tax before it is too late. There is no evidence to suggest that readyto- drink products (RTDs) are the major cause of hospital admissions or police arrests. A major health survey by Roy Morgan research group shows Australians who consume alcohol at dangerous levels are more than eight times more likely to consume products other than RTDs. It is men who are indulging in binge drinking at alarmingly dangerous levels and it is not RTDs they are getting drunk on.
The industry agrees that excessive alcohol consumption is an issue among all age groups - not just the young. We also argue that if achieving better health outcomes is the purpose of alcohol taxation, all alcohol beverages should be taxed according to alcohol content. The Government cannot conveniently claim that RTDs are the sole cause of problem drinking in our community. It cannot ignore the fact that products twice as high in alcohol as the ready-to-drink cans and bottles are sold at significantly lower prices and at significantly lower rates of tax.
The Distilled Spirits Industry Council of Australia's mission is to create an informed political and social environment that educates consumers about moderate alcohol consumption and encourages responsible community attitudes towards alcohol.
The Australian 29/04/2008 - Page: 15
Pop goes the alcohol binge-tax defence
There has always been money for better education
The Rudd Government has successfully turned a moral panic over binge drinking into a $500 million-a-year budget windfall. To do so, it harnessed the economic ignorance of a politically correct, socially interventionist, left-leaning media eager to jump on the alcopop bandwagon. There is plenty of evidence that the pre-mixed spirits have become the drink of young women who do not want to pay for a Cosmopolitan cocktail. But there is less evidence that the roots of binge drinking can be traced to the invention of the Bacardi Breezer. Economic logic dictates that if, like Cosmopolitans, pre-mixed spirits become too expensive, would-be drinkers will move further down the alcohol cost curve.
This is not to say that binge drinking is not price-sensitive. But more than anything, the alcopop issue highlights the discretionary tax regime on alcohol that has been used to favour one interest group over another. The issue has once again shown that many people will support punitive taxes as long as they are applied to other people. It took no time at all for the wellbeing police to argue that the taxes should be raised on tobacco to discourage smoking. This is despite the findings of a report into the costs of tobacco, alcohol and illicit drug abuse to Australian society in 2004-2005, prepared for the federal Department of Health and Ageing this year. The report finds “there is a great deal of persuasive evidence that the demand for tobacco is relatively unresponsive to changes in tobacco prices.” It also confirms that the federal government already makes a profit on alcohol sales of more than $1.8 billion a year and a profit of $2.8 billion a year from tobacco excise.
What is missing in the alcopop debate is any hard evidence that there has been a significant increase in binge drinking, rather than a switch in the type of product consumed. An Australian Bureau of Statistics snap-shot into Australian alcohol consumption in 2004-2005 certainly found that 75 per cent of high-risk drinkers aged 18-24 drank ready-to-drink spirits and liqueurs. Overall, high-risk drinkers, including 78 per cent of females, were likely to drink wine or sparkling wine. By drinking wine, more seasoned drinkers are taking advantage of the Government’s more favourable tax treatment of the Australian wine industry. Cask wine is taxed at 6c per standard drink, compared with 20c per drink for bottled wine, 37c for beer and 81c for spirits. Rather than remove a Howard Government subsidy on pre-mixed drinks, the Rudd Government has returned to a system under which all spirits are taxed at a higher rate because they have traditionally been considered a drink for rich people.
Pre-mixed drinks were given a lower excise regime than bottled spirits after the GST was introduced because the government accepted the argument that all beverages containing less than 10% alcohol by volume should be treated equally. Even then, the Howard Government gave beer a discount rating, treating all 5 per cent alcohol beer as if it were 3.5 per cent alcohol by volume. If the Government was serious about using tax to control alcohol consumption, it would tax alcohol content equally, regardless of product.
The Australian is naturally suspicious of any policies designed to favour or punish one class of people over another. It inevitably leads to moral crusades that are not rooted in fact. This includes Environment Minister Peter Garrett’s campaign to ban plastic bags, despite the Productivity Commission findings that many of the accepted wisdoms about the environmental damage caused by plastic bags were wrong. It seems obvious to us that if alcopops are made more expensive, consumers will either pay the additional cost or do what their parents did - drink cheap wine instead. We do not condone binge drinking but nor do we see it as a modern scourge. If anything, the popularity of pre-mixed drinks reflects the greater financial and social independence of modern woman. That is a good thing. The Government has always had the opportunity to spend more of its alcohol profits on education to encourage everyone to drink more safely.
Adelaide Advertiser 29/05/2008 - Page: 2
Alcopop sales down, spirits up
SALES of pre-mixed alcoholic drinks have plunged dramatically in the wake of the Federal Government's 70 per cent tax hike on the popular drinks.
The peak industry body also says there has been a "staggering" 20 per cent jump in the sales of full-strength spirits such as vodka, gin, and whisky over the same period.
Figures released yesterday by the Distilled Spirits Industry Council of Australia, show sales of the drinks, known as alcopops or ready-to-drinks, have dived by as much as 39 per cent in one month since the tax was introduced. The news is likely to be seized on by the Government as evidence the alcopop tax - sold as a health measure despite its $3.1 billion revenue gain for the Government - is actually working to dampen demand for the drinks.
Health Minister Nicola Roxon said the decline in alcopop sales showed the tax hike was working.
"We know that almost 20,000 girls aged 15 and younger have a weekly drinking habit and hopefully this is the first sign of a turnaround," she said.
DSICA information manager Stephen Riden said the new data, comparing a six-week period before the April 27 rise with two weeks immediately after it was introduced, showed there had been a shift to people mixing their own drinks.
"The real problem is that self-mixing drinks makes it near impossible to know how much alcohol is being served and consumed," he said.
The Australian 29/05/2008 - Page: 5
Alcopop drinkers `turning
to spirits'
SALES of alcopops plummeted by almost 40 per cent in the fortnight after last month's lightning tax hike on the drinks but any health gains have been offset by a 20 per cent jump in stronger, straight spirit sales.
The first national data on sales of pre-mixed and straight spirit sales will be released today by the Distilled Spirits Industry Council of Australia as the Rudd Government continues to defend the alcopop excise increase as a way to cut binge drinking.
The council's information and research manager Stephen Riden said the data made a
mockery of the Government's stated aim.
The words `abject failure' would spring to mind," Mr Riden said. "This is an unintended consequence of the Government's decision to tax a narrow range of products. It defies common sense that people would not shift to other products."
Mr Riden said one major company, which did not want to be named, had seen its bottled, full-spirit sales skyrocket: up 85 per cent in the month after the April 27 excise increase compared with the same period a year earlier. Its alcopops volume declined 30 per cent.
He said the switch had effectively increased the amount of standard drinks consumed by a quarter.
The DSICA data, drawn from the latest Nielsen ScanTrak survey of liquor retailers and
independent bottleshops nationwide, showed a 20 per cent increase in sales of hip flask (375ml) bottles of full-strength spirits.
Sales of 700ml bottles rose by 21 per cent.
By comparison, sales of dark spirit alcopops favoured by men over the age of 25 dropped by 39 per cent, DSICA said.
The dark-spirit drinks mix scotch, rum and bourbon with cola and other soft drinks. Light-spirit drinks, containing the vodka, gin and white rum preferred by females, saw a
37 per cent slide in sales.
Despite the figures, Health Minister Nicola Roxon yesterday stood by Treasury's target of reducing the forecast growth in alcopop sales by 42.7 million bottles in 2008-09 as a result of the excise hike.
"This is a measure that has been in force for fully one month now," she said. "We are confident that it will have an impact."
Ms Roxon said young people in particular the targets of the Rudd Government's crackdown on binge drinking were "very price sensitive", although she acknowledged some would keep consuming alcopops regardless.
"I would be a very happy cabinet minister if we didn't collect the full amount of that tax because consumption had reduced even more heavily," she said. "But if we had put in the budget papers an expectation that suddenly every person across the country stopped drinking alcopops we would be accused of being totally unrealistic.''
Instead, Treasury modelling assumed a modest 4 per cent slowdown in alcopop sales from the levels that would have been reached without the excise increase.
The Rudd Government's decision to target alcopops for higher excises has proven controversial because other drinks such as cask wine and full strength beer with equal or higher alcohol content face lower taxes.
The Opposition has vowed to block the measure in the Senate.
Herald Sun 29/05/2008 - Page: 19
Pre-mixed down, but spirits up
SALES of alcopops have fallen by nearly 40 per cent since Kevin Rudd hit the drinks with a 70 per cent tax rise.
Many drinkers are switching to straight spirits, with sales of hip flasks and 700ml bottles up by 20 per cent.
A major industry survey shows the tax has had an immediate and dramatic impact on ready-to-drink alcohol sales.
Sales of vodka, gin and white rum mixed drinks, preferred by young women, fell by 37 per cent in the two weeks after the tax was announced.
The plunge was even more marked for dark spirit RTDs, with sales of bourbon, scotch and rum drinks falling by 39 per cent, the AC Nielsen ScanTrack Liquor Survey shows.
Health Minister Nicola Roxon said the drop in alcopop sales showed the tax was working.
"It's especially encouraging to see the drop in sales of vodka-based spirits, which we know are often targeted at young women," Ms Roxon said.
"With almost 20,000 girls aged 15 and younger having a weekly drinking habit, it was time to act."
But the Distilled Spirits Industry Council of Australia said RTD drinkers were turning to bottled spirits, with potentially dangerous consequences. "Not only have consumers simply substituted full-strength spirits for RTDs, the real problem is that self-mixing drinks makes it near impossible to know how much alcohol is being served and consumed," spokesman Stephen Riden said.
He said the big fall in dark-spirit RTD sales showed older male drinkers were being hit by the policy aimed at teens.
The Opposition has threatened to block the tax in the Senate, branding it a revenue raiser.
Opposition health spokesman
Joe Hockey said the figures confirmed
Treasury advice that
drinkers would simply switch to
other products.
"They need to look at education and law enforcement and not pass a tax grab off as health policy," Mr Hockey said.
The price of a six-pack RTDs at Coles Liquorland has jumped 24 per cent, from $18.99 to $23.59, since the tax rise on April 27.
The price of a carton is now $76.99 - up $10 from $65.99. Many bottle shops are now selling spirits and mixers such as coke together in "ready-to-go" packs.
Sydney Morning Herald 29/05/2008 - Page: 3
Forget alcopops, we want the hard stuff
THE alcopops tax has driven drinkers to the bottle - of full strength spirits, a liquor industry survey of alcohol sales has found.
The 70 per cent excise increase designed to discourage young people from turning into binge drinkers has cut sales of ready-to-drink alcopop products sharply, but fuelled a rise in sales of bottles and hip flasks of the real thing.
The industry says the net result is that sales of alcohol by volume may even have increased - an outcome that would contradict a Treasury forecast.
The Distilled Spirits Industry Council of Australia commissioned Nielsen ScanTrak to conduct a survey, which found that in the fortnight after the tax rise on April 27, sales of alcopops plunged by 38 per cent.
But sales of 700ml bottles of spirits rose by 21 per cent.
The survey did not measure sales of larger bottles of spirits, or lower-taxed beer and wine.
A spokesman for the council, Stephen Riden, said that when these were accounted for, "it is likely that the total volume of alcohol purchases in this period has actually risen."
The finding was "the first hard and unequivocal evidence of the unintended social and health consequences of the Government's RTD take hike,"he said.
Experts have called on the
Government to impose a higher,
uniform tax across all alcohol
types to discourage drinkhopping
of the kind revealed by
the survey.
But the Minister for Health, Nicola Roxon, has refused to consider looking at a uniform alcohol tax, leaving it open to be addressed by her new preventative health taskforce.
Yesterday she hailed the "dramatic decline in sales of alcopops", which she said showed the budget measure was working.
"It's great to see the drop in vodka-based spirits, which we know are targeted at young women," she said.
Almost 20,000 girls 15 and younger had a weekly drinking habit. Hopefully this was the sign of a turnaround, Ms Roxon said.
The explosion in sales of vodka-based spirits before the budget proved how necessary this measure was, she said.
The Nielsen survey indicates the budget increase has had a slightly greater impact on males.
The sales of ready-to-drink products containing Scotch, rum or bourbon fell by 39 per cent while alcopops with vodka, gin or white rum preferred by females fell by 37 per cent.
After the budget, the Treasurer, Wayne Swan, released a document which assumed the alcopops tax would have no overall effect on the consumption of other alcoholic drinks.
Herald Sun 28/07/2008 - Page: 3
AUSTRALIA'S youth have swapped alcopops for hard liquor in an apparent dramatic failure of the Rudd Government's efforts to curb teenage binge drinking.
Figures from major distillers last night revealed that an additional 21 million standard spirit drinks, or 266,000 litres of alcohol, had been drunk in the two months after the introduction of the 70 per cent tax rise on alcopops.
The tax lifted the price of teenagers' popular premixed drinks by up to $1.30 a bottle, raising an extra $2 billion in revenue for the Government.
But Distilled Spirits Industry Council of Australia data has confirmed there has been a major "alco-swap".
The council compared sales from April before the tax rise and sales in June after the rise, showing a huge swing across to pure spirits, and evidence that teenagers were buying cheap wine and cider instead.
"These figures further prove the (alcopopstax) trial has failed," the council's information manager Stephen Riden said.
"The unintended and serious consequences of the tax are clear. Far from reducing the amount of alcohol consumed, the tax has turned many (alcopop) drinkers to drinking bottles of spirits at significantly higher alcohol content levels."
Family First's Senator Steve Fielding said the figures showed the Government's efforts to pull in teenage drinkings were misconceived.
"We have turned a drinking problem into a tax problem," Senator Fielding said.
The Government collects $1.75 million a day from the higher tax and alcopops are now taxed at 84 per cent for each standard drink.
Daily Telegraph 28/07/2008 - Page: 2
IT was meant to reduce the amount alcohol being consumed by young people, but it seems Kevin Rudd's tax on alcopops has had the opposite effect.
New figures show Mr Rudd's 70 per cent tax hike on alcopops has resulted in the more expensive RTDs being left on shelves, while fullstrength bottles of spirits are walking out the door.
The Distilled Spirits Industry Council of Australia (DSICA) claims the data proves Mr Rudd's plan to tackle binge drinking has backfired.
Last month, drinkers bought 30 per cent less alcopops than they did in April - before the RTD tax hike was imposed.
However sales of fullstrength bottled spirits rose 46 per cent.
DSICA admits seasonal factors are at play, but is convinced the tax hike has still pushed up consumption. It said overall there was a 10 per cent increase in the number of standard spirit drinks sold last month, compared with April.
"The complete failure of the controversial RTD tax trial has been exposed," said DSICA's Stephen Riden. "An extra 21 million standard spirit drinks, or 266,000 litres of alcohol, were sold after the introduction of the 70 per cent tax increase on ready-to-drink products.
Sydney Morning Herald 28/07/2008 - Page: 6
Alcopop tax increased drink sales: distillers
DISTILLERS have stepped up their campaign against the Federal Government's controversial "alcopops" tax rise, releasing figures today showing the overall number of standard drinks sold each month - including alcopops and full-strength spirits - has increased by 10 per cent since the tax was raised three months ago.
The Distilled Spirits Industry Council of Australia said this was evidence the attempt to stop binge drinking had failed. It said the figures showed the decrease in sales of "ready to drink" beverages had been more than offset by an increase in full-strength spirits sales.
"Far from reducing the amount of alcohol consumed, the tax has turned many RTD drinkers to drinking bottles of spirits at significantly higher alcohol content levels," said Stephen Riden, the council's research manager.
But a Herald analysis of industry sales figures over the year to June found a decrease in the overall consumption of alcohol on a year-ended basis.
The Minister for Health, Nicola Roxon, rejected the council's figures, saying they had been constructed in a selective way to bolster the industry's version of the truth. "It's a well-known fact that sales vary from month to month with the seasons, so these figures mean very little by themselves. The spirits industry should spend less time protecting their financial self-interest and more time helping to tackle binge drinking in the community."
Legislation to enshrine the tax rise, which took effect on April 27, is opposed by the Coalition in the Senate. Ms Roxon is also yet to secure the support from two independent and five Green senators.
The independent South Australian senator, Nick Xenophon, told the Herald he needed more information before making a decision on whether to support the tax-rise legislation. "I'm still not committing to it, and obviously these latest figures, it would be foolish to ignore them, and I do want more information."
The Family First senator, Steve Fielding, was less equivocal in his response to the figures, saying they proved the tax increase had not tackled the binge-drinking problem.
The figures released today compare monthly sales in April, before the tax was introduced, and last month. The number of standard drinks of alcopops sold slumped 30 per cent in that time. However, monthly sales of fullstrength spirits rose 46 per cent, suggesting a rise in overall alcohol consumption.
The Herald figures show that compared with June last year sales of ready-to-drink beverages measured in standard drinks have fallen 42 per cent. But the rise in sales of fullstrength spirits was only 24 per cent, leaving a fall in the overall number of standard drinks sold of 8.5 per cent over the year. Senator Fielding is yet to announce his decision. The five Greens senators are withholding their support until the outcome of a Senate inquiry.
West Australian 28/07/2008 - Page: 11
Far from slowing the consumption of spirits, the Rudd Government's 70 per cent tax increase on ready-todrink products, so called alcopops, has increased the volume of alcohol consumed.
Data released by the Distilled Spirits Industry Council of Australia shows that while the sale of RTDs has fallen 30 per cent since the excise on pre-mixed spirits was increased in April, overall consumption of spirits has increased 10 per cent- 21 million standard drinks or 266,000 litres of alcoholic spirits.
"These new figures further prove that the RTD tax trial has failed," DSICA research manager Stephen Riden said. "The unintended and serious consequences of the tax are clear.
"Far from reducing the amount of alcohol consumed, the tax has turned many RTD drinkers to drinking bottles of spirits at significantly higher alcohol content levels. That means inexperienced drinkers run the risk of losing track of how much alcohol they are consuming and there is a much greater risk of drink spiking."
Mr Riden said the Federal Government should dump the tax increase on alcopops, which is estimated to be collecting an extra $1.75 million a day.
The measure is expected to collect $3.1 billion over the next four years and though it took effect in late April, it needs supporting legislation to be passed in the Senate before April next year to be formalised.
Family First Senator Steve Fielding said the distillers' data confirmed the alcopops tax had merely encouraged drinkers to substitute RTDs with cheaper spirits.
"If the Rudd Government is serious about tackling binge drinking, it would stop hiding behind its billion dollar alcopops tax grab and immediately support Family First's plan for alcohol warning labels and a restriction on alcohol TV advertising till 9pm," Senator Fielding said.
"Australia has a binge-drinking problem with a huge social cost of $15.3 billion per year.
"It needs create a culture of responsible drinking."
Independent Senator Nick Xenophon said he was concerned the $53 million earmarked for problem drinking programs was not enough.
The Federal Government is reportedly planning to unify laws across all States and Territories to control the supply of alcohol to minors.
But it is believed to have ruled out banning young people aged 18 to 21 from buying alcohol at bottle shops, a move about to be introduced in parts of England and Scotland.
Adelaide Advertiser 28/07/2008 - Page:18
NEW evidence that the consumption of hard liquor is increasing despite the Government's 70 per cent alcopops tax rise is alarming.
It is a salutary lesson to the still relatively new Rudd Government that public policy is rarely easy and that glib answers can have unintended consequences.
That price-sensitive young drinkers have moved from pre-mixed drinks to mixing their own should not be surprising.
Of course these drinkers will shift to a more economical alternative when faced with a significant price rise.
What is surprising though is that the Government apparently did not foresee this.
While it is too early to be definitive, it seems this so-called health measure, which conveniently lines Government coffers with billions in extra revenue, was hasty, illconceived and may have made things worse.
What can be definitively argued for, however, is more of the money raised being directed to effective anti-binge drinking programs. The onus is now on the Government to get results from
The Australian 28/07/2008 - Page: 5
Alcopop tax jacks up sales of spirits
CONSUMPTION of spirits has soared despite the Rudd Government's alcopops tax slug, rebuffing claims of better health outcomes made by ministers but delivering a double dividend to Treasury coffers.
Liquor Merchants Association of Australia figures show sales of pre-mixed alcoholic beverages fell almost 30 per cent between the April tax hike of 70 per cent and June, but bottled spirits sales rose by just under 50 per cent, leading to an overall increase in spirit sales of more than 10 per cent or 21 million standard spirit drinks.
The leap in consumption has created a revenue boom for the Government.
The budget papers show Treasury will receive $1.75 million a day from the excise changes to pre-mixed drinks. Industry sources said the overall increase in spirits consumption delivered an additional windfall tax gain last month alone of almost $600,000 a day.
The Government claimed that the 70 per cent increase in excise on alcopops would help tackle binge-drinking, particularly among young women, when it introduced the measure.
A steady flow of data since then has cast doubt on the claim.
"These new figures further prove that the RTD (ready to drink) tax trail has failed," Distilled Spirits Industry Council spokesman Stephen Riden said.
"The unintended and serious consequences of the tax are clear. Far from reducing the amount of alcohol consumed, the tax has turned many RTD drinkers to drinking bottles of spirits at significantly higher alcohol-content levels."
Australian Liquor Stores Association chief executive Terry Mott said taxes were not effective health tools.
"We would be happier to work with government on other more productive means of overcoming any misuse of alcohol by target groups," he said.
The Government has accused the spirits industry of selective use of data. "It's a well-known fact that sales vary from month to month with the seasons, so these figures mean very little by themselves," Health Minister Nicola Roxon said.
"I am confident this measure will help to tackle bingedrinking and I'm looking forward to seeing robust data, with comprehensive sales figures."
Opposition health spokesman Joe Hockey described the tax increase as "a farce".
"The figures illustrate that it was not a health initiative," he said. It was a revenue initiative. It illustrates that when you make policy on the run, you make mistakes."
While excise is being collected at the new, higher level, the increase may still be struck down by the Senate, with the Opposition, the Greens and the two crossbench senators all unhappy with various aspects of the Government's approach to binge-drinking.
Family First's Steve Fielding said warning labels on alcohol would do more to tackle bingedrinking that the alcopops tax.
"It's crazy to think that we have turned Australia's bingedrinking problem into a tax problem," he said yesterday.
"Australia needs to tackle outbinge- drinking problem by creating a culture of responsible drinking.
"As a nation, we have tackled our road toll, our drug toll and our tobacco toll. The time is right to tackle Australia's alcohol toll."
The Australian 28/07/2008 - Page: 9
A LESSON IN SPENDING - Consumers will defy central planners if it suits them
AMBULANCE officers in western Sydney have had a gutful of being treated as taxi drivers, The Daily Telegraph reported last week. Pensioners have been feigning illness to cadge a free ride to Mt Druitt hospital, where they give medical staff the slip and head straight for the mall across the road to do their weekly shop.
While The Australian is not endorsing such behaviour, it is nevertheless an example of how people make rational economic decisions when they choose between calling a taxi ($3.10 flagfall plus $1.85 a km) or calling an ambulance (free to pension card holders) in a way that infuriates central planners.
The latest figures from the alcohol industry show young consumers are no less economically rational than their elders. By increasing the tax on readymixed spirits, obstensibly to reduce binge drinking, the Government has simply driven drinkers, young and old, to unmixed spirits. The Liquor Merchants Association reports that sales of bottled spirits are up by almost 50 per cent since the budget changes.
This suggests Treasurer Wayne Swan either had a very poor understanding of how price signals operate, or a very good grasp of how to raise $3 billion in extra revenue by capitalising on the perceptions of moral panic about teenage binge drinking.
Either way, there are important lessons in ambulances and alcopops for Canberra bureaucrats as they work out how to apply a carbon emission trading scheme. The ink has barely dried on Climate Change minister Penny Wong's green paper, but it is already apparent that slapping a price on carbon emmissions may not necessarily change people's behaviour, at least not in the ways we might want. Compensating measures, such as offsetting the additional price of petrol with a reduction in excise, may be politically wise but they will inevitably have perverse and unexpected market consequences.
This is not to argue we should give up on a carbon trading scheme, but it is an argument for proceeding cautiously and methodically, as Kevin Rudd's Government gives every impression of doing. Fortunately, the Prime Minister has largely rejected the advice of the green ideologues who can see no connection between the economy and the environment.
Courier Mail 28/07/2008 - Page: 7
Hard liquor fills ready-mix void
Nips getting bigger since alcopop tax
AUSTRALIANS knocked back an extra shot of hard liquor for every man, woman and child the month after the alcopops tax was introduced.
New figures showing an increase in hard liquor consumption following the tax are being used by the industry to demand the tax on ready-to-drink liquor be scrapped.
Family First Senator Steve Fielding also claims the figures confirm his view the 70 per cent alcopops tax simply pushed drinkers into buying cheaper spirits.
The Liquor Merchant's Association of Australia, which collects sales data from across the nation, said between April (when the tax was introduced) and June there was a 46 per cent increase in the volume of alcohol sold in full-strength bottled spirits the equivalent of an extra 48 million standard drinks.
At the same time there was a reduction in ready-to-drink (RTD) alcopops to the tune of 27 million standard drinks.
Australians had effectively consumed an extra 21 million shots of hard liquor in the wake of a tax designed to stop binge drinking, the association said.
Previous sales figures from April 2007 to June 2007 show there appears to be a seasonal uptake in harder spirits as the winter months come on. But the 2008 figures still show a dramatic increase in hard spirit consumption which Stephen Riden, information and research manager for the Distilled Spirits Industry Council of Australia, says are solid proof the RTD tax trial has failed. "It's just not working as a public health measure," he said.
"The unintended and serious consequences of the tax are clear.
"Far from reducing the amount of alcohol consumed, the tax has turned many RTD drinkers to drinking bottles of spirits at significantly higher alcohol content levels."
While Health Minister Nicola Roxon remains committed to the tax, Senator Fielding says the Government is clearly trying to dress up a revenue grab as a health measure, and it's failed.
The Government's taskforce on binge drinking, the Ministerial Council on Drug Strategy, now wants to wipe out many inconsistencies across Australian jurisdictions affecting minors and alcohol.
In some states for example restrictions on supplying alcohol to minors relate only to licensed premises, or to public venues and state penalties vary from $550 to $20,000.
But Ms Roxon said there were no plans to introduce a British-style ban on under-21s buying alcohol from liquor stores and supermarkets.
The Age 28/07/2008 - Page:3
Alcopops sales down, but spirits booming
Tax a flop, says liquor industry
controversial alcopops tax has failed miserably, causing a spike in the consumption of spirits, according to critics who want it dumped.
According to the Distilled Spirits Industry Council of Australia, the three-month-old tax has had a "substitute effect" on the market, with drinkers now more inclined to buy straight spirits and mix the drinks themselves.
Data to be released today by the Liquor Merchants Association of Australia shows that while there was a 30% fall in the volume of ready-to-drink (RTD) alcohol sold between April and June, it was cancelled out by a rise of 46% in the amount of fullstrength bottled spirits sold over the same period.
Overall, the national data showed a 10% increase in the number of standard spirit drinks purchased in the three months to June, the equivalent of an extra 21 million standard spirit drinks, or 266,000 litres of alcohol.
The Federal Government's 70% tax increase on alcopops, criticised by the Opposition as a tax grab that would not stop binge drinking, came into effect on April 27. This made yesterday the three-month anniversary of the policy.
The distillers' council estimates that in that time, the Government has reaped about $1.75 million a day from the tax.
A spokesman, Stephen Riden, said the sales figures clearly illustrated that under the new tax, RTD drinkers were instead purchasing bottles of straight spirits, which contained significantly more alcohol.
"The price of the pre-mixed drink six-packs is now close enough to the price of a bottle of spirits, and people are realising that they can buy a bottle of spirits and do their own mixing," Mr Riden said. "They are getting a lot more alcohol for a bit more money."
He said that when people mixed their own drinks, there was a danger that they could drink more than they had intended to.
A director of Southern Independent Liquor Group, Phil McGrath, said he had seen an increase of about 20% in bottled spirit sales in the past three months, with sweet white wine also registering a slight increase in sales.
He said RTD sales softened by about 39% when the tax was introduced, but sales appeared to be coming back again slightly.
Mr McGrath, a retailer, with three suburban stores, described the Government's alcopop tax as a "mindless tax grab", which should be abandoned.
"The tax policy has missed its mark by a mile," he said. But a director of the Community Alcohol Action Network, Geoff Munro, warned that the liquor merchants were placing their own political interpretation "on brutal figures".
"These figures tell us very little," he said. Most RTDs are consumed by adults, and the RTD tax was aimed at discouraging under-age drinkers from drinking. But we don't know who has made the switch to spirits."
Federal Health Minister Nicola Roxon said the spirits industry was relying on selective data to promote their cause.
"Unfortunately, they're more worried about their own profits than the health of young Australians," she said yesterday.
Her spokesman said earlier that Government figures, which predicted 42 million fewer bottles of RTD alcohol would be sold this year as a result of the tax policy, contradicted industry figures.
"Since the Liberal Party gave alcopops a tax break in 2000, their growth has exploded, with sales up 250%," spokesman Sean Kelly said.
Senator Steve Fielding, of Family First, said warning labels on alcohol would be more effective than the tax on alcopops.
-
Key Points
- Distillers and liquor merchants
point to contradictions. - People mixing their own get
more alcohol for their money. - Minister accuses industry of
using selective figures.
Adelaide Advertiser 28/07/2008 - Page:5
Liquor sales surge blunts alcopops tax
HARD liquor sales increased by more than 10 per cent after the introduction of the Rudd Government's "health" tax on alcopops designed to cut consumption, new figures reveal.
Some 266,000 litres of alcohol, equivalent to an extra 21 million standard spirits drinks, were sold in June - the first full month after the 70 per cent tax hike - when compared to April sales, before the tax increase.
The disturbing data suggests the Government's tax rise on sugary alcopops - also known as "ready-todrinks" - has been unsuccessful in addressing escalating alcohol consumption.
The figures, supplied by the Distilled Spirits Industry Council of Australia, show the Government's move has merely resulted in a shift to full-strength liquor.
The sales figures reveal a 10.4 per cent increase in spirits sales overall, even though there was a 30 per cent reduction in RTDs from 92 million standard drinks in April to 65 million in June, after the tax increase was applied.
That dramatic reduction in RTDs such as lemonade and vodka or rum and cola, was more than made up for by the increase in general spirits sales which went from 106 million standard drinks in April to 154 million in June - an increase of more than 45 per cent.
"These new figures prove that the RTD tax trial has failed," the council's Stephen Riden said.
He said the trend meant young drinkers were at greater risk of both overdoing their consumption and of falling victim to foul play.
The Rudd Government sold the increase, which it introduced before the Budget, as a health measure designed to address alarming rates of alcohol abuse among young drinkers, particularly females. The figures do not auger well for the Government's chances of getting its tax through the Senate.
Speaking ahead of the release of these figures, Senator Nick Xenophon - one of the MPs the Government needs - stressed he was only interested in outcomes.
Health Minister Nicola Roxon argued the figures were inconclusive. Project manager and cabaret performer Tamara Shinners said she did not think the tax would work. "It's ridiculous, there's no sense to it," she said at the Exeter Hotel, Rundle St city yesterday. "People will binge drink anyway."
