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IAC report on spirits, spirituous beverages, etc: and reduction in brandy excise rate

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25 October 1979

(Statement by the Hon P.J. Nixon, M.P., Minister for Primary " Industry) . . ■ . ■ '


The Minister for Primary Industry, Mr Peter Nixon,

said today the Government had decided to reduce the excise

rate for brandy by $2.75 per litre of alcohol. An equivalent

reduction would be made on the rate of customs duty on brandy

in order to comply with international commitments.

The Government had also decided to remove the tariff

quotas and additional temporary duties which had applied to

imported brandy since August 1977.

Mr Nixon was announcing decisions taken by the

Government in connection with the report of the Industries

Assistance Commission of 8 June 1979 on spirits, spirituous

beverages, etc.

The Minister said that to assist local distilling the

IAC had recommended a uniform protective margin of 25 per cent

ad valorem to replace the various specific duties currently

applying. This would involve a slight increase5 in tariff

assistance for most potable spirits.

The Commission had also recommended a single specific

rate of duty per container, supplementary to the 25% ad valorem

rate, to provide assistance for diluting, bottling and . ■

i f . . ' .

i. packaging activities. This recommendation involved an initial

reduction in the present level of assistance for this sector and i ' - ' _ .

with a phasing down of this assistance over a period of three



Mr Nixon said that the Government had not accepted these

recommendations. Their implementation would have had relatively

little impact on the prices of imported spirits, but would

have required international negotiations under GATT, covering

trade levels of a high order, to seek Australia's release from

tariff bindings on certain spirituous beverages. ' ' ‘ ‘ - . ' , ' .

Mr Nixon said that the Government h a d , however, been

concerned at the difficulties facing grapegrowers particularly

in the South Australian Riverland-because of the importance, to

them of brandy distillation as an 'outlet for grapes. Mr Nixon

said that this region and the adjacent areas along the Murray

River to Mildura produce virtually all Australia’s grapes for

brandy, and about 90% of Australian brandy is distilled in the .

area. Brandy distilling is an important activity for the

South Australian co-operative wineries.

Because of a concern at the likely effects in these

regions if Australian brandy's share of the total potable spirits

- market continued to decline, the Government decided to reduce;

the excise rate for brandy to enhance its competitive position.

Mr Nixon said that the level of assistance for spirits

other than brandy would remain unchanged except for the

following:- .

. duty on other compound alcoholic preparations

would be 13% except for AngostUra bitters which

would be free of duty

. industrial alcohol would be dutiable .

at 15% as recommended by the IAC ·

. the margin between excise duty and customs duty

for certain liquers would be set at $0.04 cents per litre of alcohol ' .

. the distinction between flavoured and unflavoured · falling in tariff items 22.09*71 and 2209-72 spirituous beverages/would be removed and all

, would be dutiable at the current lower rate applying

to flavoured spirituous beverages. .

Mr Nixon said that suggestions made by the IAC in .

respect of regulations applicable to spirituous beverages

would be subject to further study in consultation with

industry sectors and State and Territory authorities. .

Changes will be made to the Customs Tariff Act 1966

and the Excise Tariff Act 1921 as soon as possible following the

resumption of Parliament in the week commencing 5 November 1979.

The Commission’s report will be available shortly from

AGPS book shops in each of the capital cities. , . .