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Spirits sales rise due to alcopop tax hike: i -

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ELEANOR HALL: The liquor industry is accusing the Federal Government of driving young drinkers onto
hard liquor with its alcopops tax and says it has the statistics to prove it.

The distilled spirits industry commissioned a study which shows that while alcopops sales have
plunged 38 per cent since the tax hike, sales of full-strength spirits and hip-flask bottles soared
at the same period by more than 20 per cent.

The industry says this shows the Government's decision has unintended social consequences, but the
Health Minister rejects the claim.

In Canberra, Sabra Lane reports.

SABRA LANE: Speaking on ABC radio in Brisbane this morning, schoolgirl Larissa had a question for
Prime Minister Kevin Rudd about his Government's tax hike on alcopops.

LARISSA: Many teenagers have resorted to purchasing strong spirits that are cheaper. How do you
feel about this and what else do you plan to do to help solve the problem?

KEVIN RUDD: Well, this is a really tough one because the Australian police commissioners just the
other day came out and said that, this is right across Australia, and said, effectively the country
is awash with alcohol. You know, there is no single solution to this. It has to happen at several
levels.

SABRA LANE: Mr Rudd didn't directly answer her question but program presenter Madonna King followed
up with another.

MADONNA KING: Prime Minister have you ever tried an alcopop?

KEVIN RUDD: That's a very good question Madonna (laughs).

MADONNA KING: Oh, I was using my best Larissa voice too.

(Laughter)

KEVIN RUDD: I'm scratching my head actually. I actually don't know.

SABRA LANE: Mr Rudd fired his first salvo in his self-declared war on teenage binge drinking last
month by increasing the tax on ready-to-drink beverages.

The tax on those drinks jumped 70 per cent to bring them into line with the tax charged on unmixed
spirits. It was an anomaly created though the introduction of the GST back in 2000.

The Opposition declared it nothing more than a $3-billion tax binge.

Regardless, the liquor industry warned it might actually push up consumption of hard liquor. It's
conducted a survey of sales of spirits prior to the tax hike and after, and has found drinkers are
substituting.

Stephen Riden is the information manager at the Distilled Spirits Industry Council of Australia.

STEPHEN RIDEN: Information that we've got from the Nielsen ScanTrack Liquor Survey was looking at
the sales of pre-mixed drinks and the sales of medium sized and small sized bottles of spirits, and
they've shown that while the pre-mixed drinks have dropped around 40 per cent, 39, 40 per cent, the
sale of bottles of spirits at the 700 and the 375ml size have actually increased by 20 per cent.

We think that as this data doesn't show the largest sized bottles of spirits or beer and wine, all
that's happened with the RTD (ready to drink) tax hike is that people have swapped across to buying
the full strength bottle of spirits.

They're probably drinking more, and we hear some anecdotal information around that from our
members' own sales data, and they're actually going to be mixing it themselves and putting
themselves at greater harm because they won't know how much they're drinking.

SABRA LANE: He says the survey results show the Government's policy has failed.

STEPHEN RIDEN: In terms of public health I think it's almost certainly failed. I think it will fail
on the excise-raising goal as well because the Treasury modelling which is skinny at best I don't
think predicted this level of drop-off.

SABRA LANE: But in the Federal Health Minister's office this morning you could say there was a
metaphorical popping of champagne bottles.

Ms Roxon says the survey results show the Government's plan of attacking binge drinking through
this measure has worked and she rejects assertions that the jump in consumption of harder spirits
shows the policy has backfired.

NICOLA ROXON: No look I think quite the opposite. These figures released by the industry show a
dramatic decline in the sale of alcopops. They do show a increase in the sale of some other
products, but even the industry themselves admits that these figures show an overall decrease of
one-million spirit drinks sold in just two weeks.

So this is, you know, one-million drinks in two weeks is a dramatic decline in anyone's language
and what they're showing is that these very popular products have dramatically declined. And we
hope that these products that are particularly attractive to young people, that their decline in
sales means that people will not be as attracted to drinking at an early age.

SABRA LANE: And Ms Roxon says the tax hike is just one measure of many that the Government will use
to attack the problem.

NICOLA ROXON: So I would say to any parent, a measure that we have taken which has reduced drinking
by one-million spirit drinks, is a positive measure. And of course we will want to see the impact
of this measure combined with our others over the coming months and years to hopefully instil a
more responsible approach to drinking across our community.

ELEANOR HALL: That's the Health Minister Nicola Roxon, ending that report by Sabra Lane in
Canberra.