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Budget 2008: Increased tax on 'ready to drink' alcoholic beverages.



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13 May 2008 NO.41

JOINT PRESS RELEASE WITH THE HON NICOLA ROXON MP MINISTER FOR HEALTH AND AGEING

Increased Tax on 'Ready to Drink' Alcoholic Beverages

As part of our ongoing efforts to tackle binge-drinking, particularly among young people, the Rudd Government has reversed a decision of the previous government which allowed 'alcopops' or 'ready-to-drink' (RTD) beverages to be taxed at an inappropriately low rate.

The Government has increased the excise and excise-equivalent customs duty rate applying to 'other excisable beverages not exceeding 10 per cent by volume of alcohol' from $39.36 per litre of alcohol content to the full strength spirits rate of $66.67 per litre of alcohol content on and from 27 April 2008.

The measure reverses a decision of the previous government to tax RTDs and alcopops at a rate similar to the full strength beer rate. Prior to 1 July 2000, the rate applicable to RTDs and alcopops was the same as that applied to full strength spirits. This decision of the Rudd Government restores that treatment.

Since the lower rate was applied in 2000 the market for RTDs has grown significantly. These beverages have become increasingly popular, including among males and females aged 14 to 19 years.

The Government is concerned at the growth in RTD consumption, particularly among young people. Binge-drinking is a community-wide problem demanding a community-wide response, and this decision by the Rudd Government is an important part of that response. Accordingly, a proportion of this revenue will be redirected to preventative health initiatives following the development of the National Health Prevention Strategy, and in conjunction with the States through the COAG reform process.

Contacts: Matthew Coghlan (Treasurer) - 0415 098 050 Sean Kelly (Minister Roxon) - 0417 108 362