Wine tax fear: Drinkers face huge price slug while growers could be ruined

TAXING wine on its alcohol content, rather than its market value, would wipe out many Sunraysia wine grape growers by making cheap bottled and cask wines far more expensive, the Sunraysia Horticultural Branch of the Victorian Farmers Federation warned yesterday.

Branch spokesman, Red Cliffs horticulturist Bill McClumpha, said the recommendation of a draft report on a floor price for alcoholic drinks, released this week by the Australian National Preventive Health Agency, was a dire threat to the wine industry’s future.

The study aims to explore ways of reducing youth binge drinking, which can lead to alcoholism and associated social harm later in life.

The report recommends that, instead of introducing a minimum or floor price for alcohol, the Federal Government should consider a volumetric tax so all alcoholic drinks are taxed on their alcohol content. 

Under such a tax, the cost of a wine cask would almost double from $14 to $27, but the cost of a premium wine might fall.

Wineries making premium wines stand to make windfall profits from a volumetric tax on wine. 

Inexpensive and premium wines have a similar alcohol content, but that of a premium wine represents a smaller fraction of its overall cost.

For more of this story, purchase your copy of Wednesday's Sunraysia Daily 07/11/2012.

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