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Tuesday, 28 August 1906

Mr HUTCHISON (Hindmarsh) . - I do not wish for a moment to discount the work performed by the Tariff Commission. But I have been at considerable trouble to investigate this question of spirits, and I wish to point out to the Chairman of the Commission that the only spirits which require to be kept in wood for two years are whisky, rum, and brandy. According to the testimony, not only of expert distillers, but of expert officers of the Customs Department, a highly rectified spirit is no better after it has been stored in wood for two years than it would be after it had been stored there for only two weeks.

Sir William Lyne - That is what I said.

Mr HUTCHISON - I cannot understand why the members of the Commission overlooked that point.

Mr Fowler - What does the honorable member mean by a " highly rectified spirit ?"

Mr HUTCHISON - I mean a spirit from which all the injurious ethers have been expelled, and one which, consequently, cannot possibly improve with age. This highly rectified spirit is used for the purpose of blending with pot still spirits which contain these ethers. Take the case of gin as an illustration. If we insisted that gin should be stored in wood for two years, it would become exactly the same colour as whisky.

Sir John Quick - If it were kept in a whisky barrel it might.

Mr HUTCHISON - Gin is always kept in iron' vessels. It is not necessary to harass the trade at all, unless the Commission can bring indisputable evidence that a highly rectified spirit will improve with age or that its consumption, when newly distilled, is injurious. The honorable and learned member for Angas was perfectly right in his contention, and I am aware that he has taken a good deal more trouble to investigate this matter than I have. The Minister, however, can soon settle the point. He has experts in his Department, whose opinions could be easily obtained.

Mr Johnson - They would report against the honorable member's suggestion.

Mr HUTCHISON - Undoubtedly they would not. I am sure that they would say that all spirits distilled by the pot still should be matured in wood for two years, because that process would undoubtedly improve them.

Mr Johnson - I am speaking of rectified spirits, which are produced at a high degree of distillation. Experts say that all the deleterious elements of those spirits are eliminated.

Mr HUTCHISON - Undoubtedly, they are, and that is why they are used as a blend. Their presence assists to reduce the injurious ethers which are contained in spirits distilled by means of the pot still.

Sir William Lyne - But they must be kept in wood.

Mr HUTCHISON - With the exception of gin. I thoroughly agree with the honorable and learned member for Bendigo that there is an unlimited opening for the use of methylated spirits. But the Minister must see that those spirits are not demethylated.

Sir William Lyne - That is provided for in the Bill.

Mr HUTCHISON - But the Minister will require to see that much more effective supervision is exercised than has been exercised hitherto. Although it has been against the law to denature spirits, we know that they have been denatured. Whilst we are affording a fair measure of protection to the distillers, we ought to see that the revenue is thoroughly protected. In this connexion I would call the attention of the Minister to the fact that a large amount of revenue is being lost to the Department through what is known as the "grogging " of casks. In dealing with this matter, I find that the Imperial Parliament has provided an elaborate set of regulations which' prevent distillers, when they are refilling their casks, from extracting spirits from the wood and from selling them, thus evading the payment of duty. A very large amount of spirit can be extracted in that way, and the Minister should see that something is done to prevent it. I should like to quote some regulations upon this subject which are in force in Great Britain. Regulation . 289 reads -

Empty casks to be refilled or removed to a distillery. - Spirit casks left empty after any operation, whether they have contained British spirits or foreign spirits, are, as a rule, to be refilled. When this is not desirable or convenient, as far as the proprietor is concerned, they may, at his option, be removed to a distillery or bonded warehouse, or they may be exported ; the casks in either case being first properly drained, and bungs, which should be of hard wood, firmly driven in.

Regulation 290 relates to the removal of empty casks to a distillery, and provides that -

When casks are so removed a dispatch showing the " number " and the " content " of each cask, the denomination and the strength of the spirit which it last contained, and the date of removal, is to be sent to the officer at the distillery or warehouse to which the casks shall be consigned. The officer at the distillery or warehouse is to send a receipt on the same document showing the date of arrival of such casks, and report whether there be any indication of the extraction of spirit from the wood of the casks during transit. The officers at any distillery or warehouse to which the empty casks are sent are to exercise a general supervision over such casks, and to see that they are not again removed from the distillery premises or warehouse for the purpose of having the spirits extracted from the wood prior to being refilled.

Regulation 291 has reference to the exportation of casks, and provides that -

When casks are exported, a dispatch showing the spirits stated in the preceding paragraph is to be sent to the export officer at the station where the ship is lying, who will state thereon whether there be any indication of the extraction of spirit from the wood during transit, and if satisfied of the contrary, certify to the actual shipment of the casks. The document thus attested should then be returned to the officer at the warehouse from which the casks were removed. In cases where the officers are not satisfied, as specified above, the casks must be detained for the decision of the Board as to whether the bond should be put in force.

Thev have to enter into a bond with regard to these casks - 292. Bond for removal to be given. - General bond may be entered into. - Bond should be given for the security of the revenue in respect to the spirit contained in the wood of such casks during their removal. If the ordinary bond be given the amount of the penalty should not be less than £2 for each puncheon, ^'2 for each hogshead, and £1 for each quarter-cask, with proportionate amounts in even pounds for casks of other kinds; but, if desired, a general bond may be given, the liability of" the remover being calculated on the above relative bases. In cases of exportation the penalty will be double the above rates.

Apart from any penalty to which the remover may be liable, it must be understood that any misuse of the option of sending casks to a distillery or warehouse may result in the withdrawal of such option. 293. Casks may be washed out instead. - Spirit casks, not belonging to a distiller, or which it may be inconvenient to send to a distillery or warehouse for refilling, or which, from unsoundness or unsuitableness the proprietor mav not wish to refill at the warehouse, may be delivered therefrom, provided that at the' expense of such proprietor they be effectually washed out with water, so as to remove the spirit from the wood prior to delivery. For this purpose each cask should be partially filled with water to the extent of a sixth part of its "content," be retained in warehouse at least six days, be rolled round at least once daily, and be left at rest after being rolled with a fresh surface in contact with water each day. The rinsings from the casks thus treated are to be destroyed in the presence of the officers, unless, at the' option *f the proprietor, duty be paid on the quantity of spirit at proof which they contain.

The fact that it is deemed necessary to frame regulations of this kind should le sufficient to show honorable members the importance of the question with which we are dealing. I know of no provision made by the Excise Department to deal with the large quantity of spirit that can be extracted in this way -

In the latter case, an account is to be taken of the quantity and strength, and the particulars are to be entered at the foot of the operation account to which the casks belong after the rinsings have been collected in suitable sized casks; and such rinsings may then be delivered on the passing of a warrant in the usual way ; or they may be added to a subsequent operation, subject to the regulations with regard to spirits reduced with water, or they may be exported either in original casks or in others of legal size. 294. On certain conditions a similar quantity may be used. - Should the proprietor give notice of his wish to pay duty on the rinsings of casks, and express a desire to obtain the spirit in a more concentrated form, a similar quantity of water, not less than 10 per cent, of the " content," may be used, the cask being retained a longer time in warehouse, the essential principle being that each part of the internal surface of the cask shall remain in contact with water for about forty-eight hours before the cask is removed from the warehouse.

On certain conditions casks may be cleared after twenty-four hours. - If, however, the proprietor should so request, the casks may be completely filled with water and the contents destroyed after remaining in the casks not less than twenty-four hours, an undertaking being given on the request that the casks shall not be subsequently "grogged." Water may be added in the warehouse or immediately on removal therefrom in the yard or other suitable premises adjacent thereto, and the casks when filled mav be left in any convenient place within the walls of a dock or under Crown lock or other place of reasonable security elsewhere. The officer must examine the casks when filled, and see the contents destroyed at any time after twenty-four hours from his examination, certifying to this effect in the register. 295. Examination and destruction of contents. - The officer must examine the casks when filled and see the contents destroyed at any time after twenty-four hours from his examination, certifying to this effect in the .register. 296. Casks emptied for methylating spirits. - When spirits are removed from the distillery or from the warehouse after methylation the empty casks are to be removed to a distillery or warehouse, subject to the foregoing regulations, or at the option of the methylator they may be washed in a locked compartment at the place of methylation in the same manner as casks washed in warehouse, the rinsings being, at the option of the methylator, destroyed or added to the spirits in the next methylation, on condition that the spirits to which the rinsings are added be not thereby reduced below the legal strength at which methylated spirit may be sent out. In case the washings are added to the methylated spirit the stock should be adjusted accordingly.

Casks of British liqueurs, such as orange bitters, of which the strength is under 42 per cent., may be delivered when emptied without the grogging regulations being applied to them. 297. Empty casks delivered. - All empty casks before being delivered from warehouse must be properly drained, and, as far as possible, subjected to examination at the time of passing the outer door, when they must be rolled over with their bungs out.

I discovered these regulations quite casually whilst glancing over Ham's Inland Revenue Y ear-Book for 1896, and I was struck by the fact that they had not been mentioned by any Minister of Trade and Customs in this House. Whilst we are effectively protecting the manufacturer, we should take steps to effectively protect the revenue. I am glad that the members of the Tariff Commission are prepared to consider the amendment of clauses 10 and 11, and I think that after giving the matter further attention they will come to the conclusion that those clauses are unnecessary, except in so far as they deal with purely pot-still spirit. Whilst I am pleased that no delay has occurred in taking steps to protect a trade which was all too rapidly falling into the hands of foreign manufacturers who have been introducing into the Commonwealth the worst kind of spirits-

Mr Johnson - Thev could not be worse than Joshua's " Boomerang " brandy

Mr HUTCHISON - I do not' know why the honorable member invariably singles out Joshua Brothers for special attention.

Mr Johnson - Because their brandy is only white spirit coloured.

Mr Fowler - More white spirit than is made by Joshua Brothers goes into circulation in Australia.

Mr HUTCHISON - Exactly. The quantity of white spirit, coloured and flavoured with essences, which goes into consumption in Australia is much larger than could possibly be issued by Joshua Brothers. I have no brief .for that firm, or for those who are guilty of the practices to which I have just referred.

Mr Johnson - I merely say that the importers are no worse than Joshua Brothers.

Mr HUTCHISON - I hope that the supervision henceforth will be more effective than it has been,- and I shall be pleased if, when the Bill is under consideration in Committee, honorable members will see that complete justice is done to the manufacturers.

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