Alcohol company finds way around “alcopop” tax

Posted by Editorial on 16th September 2008

One of Australia’s leading producers of RTD alcoholic beverages has discovered that they can steer clear of the ‘alcopop’ tax by using alcohol derived from beer.

Independent Distillers told Fairfax that they are set to launch a beverage called ‘Bolt’, which should appeal to younger drinkers with its passionfruit, raspberry and blueberry flavours. The drink does not use typical spirits, instead utilising alcohol derived from beer. The beer taste is stripped out during production, however, with the beverage only attracting a tax of $39.40/litre of pure alcohol (the tax applied to beer) as opposed to the $66.70/litre of alcohol for alcopops.

A spokesman for Independent Distillers told Fairfax that they were not trying to exploit a loophole in the legislation, but suggested the situation highlighted an issue with taxing spirits at a higher rate than other alcoholic products.

The tax on RTD alcoholic beverages has been in place since May, although it has yet to be passed through the Senate. The Liberal Party has indicated they will try to block the tax and Family First Senator Steve Fielding has indicated he may not support it because he believes a more comprehensive strategy to deal with binge drinking is required.

If the Liberals and Mr Fielding oppose the Bill then it will not be able to get approval in the Senate and the funds already raised could be returned to the producers of the beverages.