Alcopop sales slump

Posted by Daniel Palmer on 21st May 2008

A fall in sales of alcopops has been recorded following the marked increase in taxes applied to the beverages by the Rudd Government.

Lion Nathan boss, Rob Murray, has claimed that sales of alcopops may have fallen by up to 30 per cent since the price hike about a month ago. “The first 4-6 weeks were always going to be the worst in terms of a drop in sales,” Mr Murray was quoted as saying in the Herald Sun. “It has been a substantial reduction in sales so far, but we will have a much clearer picture in six months’ time about the true impact of the tax changes.”

Reports from retailers indicate a shift in consumer preferences toward bottled spirits away from ready-to-drink (RTD) varieties.

The effectiveness of the tax has been questioned, with the argument that consumers will just shift from one alcoholic product to another further strengthened by the reported increase in sales of bottled spirits. There has also been claims the tax hikes are merely for revenue raising purposes, with the Government’s anticipated tax figures apparently implying consumption of RTD’s will still rise by 10 per cent over the next five years.

Anti-drug groups in Australia have, however, welcomed the taxes amid hope they will lead to further strategies to reduce rates of binge-drinking and Family First Senator Steve Fielding has also called for greater action. “If the Rudd government is serious about creating a culture of responsible drinking AND it wants to prove the alcopops tax is not just a tax grab, the government would also introduce alcohol warning labels to alcopops and all other alcohol products,” Mr Fielding said in a statement.

The tax hike has yet to be approved in the Senate and, with the Liberal and Greens Parties both flagging their possible resistance to the taxes, the prices of RTD beverages may yet return to previous levels.

Public and government pressure on alcoholic beverage producers is increasing and the need to be socially responsible is becoming more important. There has also been discussion about limiting alcohol advertising on television and the Senate Community Affairs Committee is due to report their findings about the need for a crackdown on alcohol advertising on June 18. Their findings will deal with suggestions to alter the Alcohol Toll Reduction Bill, introduced to the Senate last year by Mr Fielding.

Senator Fielding is still keen on the reduction of advertising as part of an improved strategy to deal with binge-drinking. “With regards to alcohol advertising, we have already restricted alcohol ads from running on TV until after 8.30pm. But there is a crazy ‘loophole’ in the law that exempts live sport on weekends, so that alcohol ads can run at any time of the day. This in itself sends the wrong message as we are linking alcohol to sport,” he said.