Call for alcohol tax overhaul in Budget

AAP
April 23, 2012

ALCOHOLIC drinks should be taxed according to alcohol strength, not price, to clamp down on irresponsible drinking of cheap booze, health groups say.

The Alcohol Policy Coalition (APC) is calling on the Federal Government to overhaul alcohol taxes in the May Budget to make drinks such as cask wine and cider more expensive.

The group, comprising VicHealth, the Cancer Council and drug and alcohol bodies, also wants a minimum floor price on alcoholic beverages to stop heavy discounting and increase the cost of high strength, high volume drinks.

The volumetric tax would calculate excise according to alcohol content, effectively scrapping the wine equalisation tax, which is levied at 29 per cent of the wholesale wine price.

The APC says the tax would have an impact similar to the alcopops levy on pre-mixed drinks, and encourage drinkers to buy lower strength drinks.

“In a climate where we are seeing a sharp increase in consumption of cider and cheap wine, particularly by high-risk drinkers, we need to ensure that the price of alcohol is related to alcohol content,” APC legal policy adviser Sondra Davoren said.

Traditional ciders are taxed in the same way as wine at about 23 cents per standard glass, compared with 30 cents per standard drink for full-strength draught beer, which has a similar alcohol content of about 5 per cent.

Alcopops are taxed at a higher rate of about 95 cents per standard drink.

Since the alcopops tax was introduced in April 2008, consumption has dropped by an estimated seven million drinks a week, the APC says.

“Yet because of the anomaly in the tax system that allows traditional ciders to be taxed like wine, these products are increasingly filling the gap left by alcopops,” Ms Davoren said.

“Cider consumption increased 18 per cent in the year following the introduction of the alcopops tax and continues to rise.”

The APC is also calling on the government to follow the UK example and introduce a minimum floor price for alcohol to raise the cost of high-strength, high-volume drinks that are associated with alcohol-related harm.