Calls to cut tax on light beer

Posted by Editorial on 12th January 2009

Chief Executive Officer of the Victorian Health Promotion Foundation, Todd Harper, has proposed removing the current excise on light beer to promote the consumption of products with lower alcohol volumes.

“With a rising tide of binge drinking and associated violence and crime, it’s essential that we shift our drinking culture towards lower alcohol alternatives,” Mr Harper said.

According to Mr Harper, the tax system provides the best chance to encourage consumers to switch their drinking preferences.

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“There is little consistency in determining how different alcohol products are taxed throughout Australia,” he explained. “The amount of tax we pay for alcoholic beverages varies enormously, depending on the product type, rather than the amount of alcohol they contain.”

Currently, the tax on a standard drink of packaged light beer containing 2 per cent alcohol is $0.19. This is 380 per cent higher than the tax on a standard drink of cask wine containing 12.5 per cent alcohol, which is only $0.05.

Mr Harper explained that recent consumption patterns indicate that high alcohol beer is the product most typically drunk at dangerous levels by Australian males. It is also more likely to be associated with late night violence and drink driving than other products, and is linked to long term health problems such as brain damage and liver disease.

“Part of the problem is that beer drinkers are switching towards full strength – or high alcohol – beers, particularly the so-called premium products. Less than 7 per cent of packaged beer currently sold in Australia is light beer,” Mr Harper noted.

He said scrapping the tax for a period of five years would determine if consumers could be persuaded to switch to low alcohol beer.

“This would reduce the cost of a slab of low alcohol beer from about $31 to $26, compared with about $38 for a slab of high alcohol beer – a big incentive for people choosing to drink responsibly. The low alcohol tax proposal could be addressed as part of the Commonwealth Government’s Henry Review which is examining the Australian taxation system.”

“Interestingly, a recent study of beer drinkers’ taste and attitudes published in the International Journal of Drug Policy found that beer drinkers cannot readily distinguish between low and high alcohol beers and can enjoy socialising equally with either,” Mr Harper concluded.

The researchers, David Segal and Tim Stockwell from the University of Victoria in Canada, suggest that ‘…with the right incentives and with effective promotions, young beer-drinking males might be encouraged to consume these products more often.’