No changes to cider taxation – yet((
Traditional cider makers have been worried about rumours that, following the Federal Budget on 8 May 2012, their products will be taxed at a rate similar to that applied to RTDs – pre-mixed spirit and cider-based products.
At present, traditional cider carries about AUD 0.23 (EUR 0.18) tax per standard drink compared with AUD 0.95 (EUR 0.74) for RTDs. Cider makers had estimated that the cost of production could double if traditional cider is taxed at the higher rate.
Their worries were dispersed, however, when the budget was released without making any changes to the cider tax.
Lobbying for a tax hike, the Distilled Spirits Industry Council of Australia had argued that traditional cider drinks, such as popular brands Strongbow and 5 Seeds, should be taxed at the higher rate of flavoured ciders, other alcopops, and spirits.
The Council emphasised that the current tax arrangement gives traditional cider a significant price advantage over other alcoholic beverages of similar alcohol content.
When the government taxed alcopops 70 percent more in 2008, consumption dropped by more than 30 percent. But consumption of cider, most of which is taxed at the lower rate of wine, grew 18 percent in the year after.
Last year, cider consumption was 2 percent of the total alcohol market in terms of volume.
The federal government collects AUD 6 billion (EUR 4.7 billion) a year from explicit duties on alcoholic beverages.
In this year’s budget small breweries have been given some tax relief by an extension of the excise refund scheme and an increase of the maximum refund to AUD 30,000 (from AUD 10,000) – a measure estimated to cost AUD 10 million (EUR 7.7 million) over four years.
Incidentally, the federal treasury estimates that total beer excise will fall by AUD 90 million to AUD 1.96 billion (EUR 1.5 billion) in the next fiscal year, based on predicted lower sales volumes and unchanged beer excise rates.
