Australia's 'alcopop' war rages on amidst global concerns

By Neil Merrett

- Last updated on GMT

Related tags: Alcoholic beverage

The Australian drinks industry continues to hit out at government tax hikes on ready-to-drink (RTD) ‘alcopop’ beverages amidst press reports of new statistics suggesting consumers are opting for spirits in their place.

It was back in April that the government put in place new tax proposals on the segment in the hope to curb irresponsible drinking levels in the country, measures that have also been adopted in other global markets.

RTD alcoholic beverages have arguably been at the forefront of growing criticisms of the alcohol industry, particularly in markets like the US and Australia, as governments around the world attempt to crack down on alcohol abuse.

While supporting some form of tax measures on controlling alcohol consumption, some European health groups have called instead for an industry-wide focus on reforming drink duties to focus on all high-alcohol content.

Stat attack

However, some Australian drink makers claim that RTD drink products have been unfairly maligned in the drive to cut down on national alcohol consumption, which they claim has risen since the new laws were implemented.

Following the inauguration of the tax hikes in the country on pre-mixed alcoholic beverages back in April, sales of straight spirits products have shot up in their place, according to the Liquor Merchants Association of Australia.

While RTD sales were found to have fallen by 30 per cent during June, spirits sales were reportedly up by 46 per cent over the same period, according to findings by the trade association, cited today by the Sydney Morning Herald newspaper.

These findings follow on from claims made last month by The Distilled Spirits Industry Council of Australia (DSICA) stating that the Australian Institute of Health and Welfare (AIHW) found there was no evidence that RTD alcohol was 'directly' linked to higher drink consumption in Australians.

European calls

Andrew McNeill, honorary secretary for the alcohol policy group Eurocare, said that statements and statistics from groups like the DSICA have proved controversial, with some critics, including the current Australian health minister, claiming they were skewed in favour of the industry.

McNeill said that in terms of a European perspective, measures that have been adopted in the bloc over advertising and selling of RTD 'Alcopop' products are short-term solutions, and that an industry-wide taxation scheme would be needed to ensure longstanding consumer protection.

"The view we have always taken on this issue is that that a 'rational' tax strategy that charged drink on the level of alcohol present in a single product is the best way forward,"​ he stated. "Alcohol is the active ingredient in all these beverages and we need a policy that addresses this fact."

Despite concerns over taxing specific products being made by the industry, the Australian government has not been alone in targeting 'alcopop' products as a key area of its drink policy, with some US officials following suite.

California scheming

A new Californian tax policy was unveiled last month to help combat the irresponsible drinking of malted products such as flavoured beers, which will come into place by 1 October this year, according to officials.

The measure, which was approved by the State Board of Equalization's (BOE) Office of Administrative Law, unsurprisingly drew scorn from manufacturers in the US, who now face a 1,650 per cent increase in tax on the products.

According to the BOE, flavoured beer will now face a $3.30 per gallon tax, from a rate of $0.20 per gallon previously.

BOE chairwoman Judy Chu said that the new classification for the beverages would be a major step in attempts to cut high levels of underage drinking among minors in the state. "It will send a signal to youth ​that 'alcopop' drinks are hard liquor - because these drinks will now have costs that are similar to hard liquor,"​ she stated. "It will make it harder for young people to access 'alcopops', and that can only be helpful in reducing underage drinking."

Non-US view

While not in favour of the latest Californian proposals to specifically persecute 'alcopops', UK-based Alcohol Concern said that it did believe that there were benefits to be had in targeting consumers' wallets in a bid to reduce irresponsible drinking.

"There is definitely a relationship between alcohol pricing and heavy drinking,"​ the spokesperson said. "However, this must be adopted beyond alcopops to the most popular drinks among young people."

Alcohol Concern added that the mid '90s popularity of 'alcopops', flavoured beer or fruit-based alcoholic drinks, had created an inaccurate stereotype that they are the only products being consumed by young and underage drinkers.

According to the spokesperson, official research shows that beer, spirits, cider and wines are all popular with young people. He added that these products were also often discounted by major retailers and should all be focused on in regards to sales costs.

"A minimum pricing scheme for all alcoholic products should therefore be adopted,"​ the spokesperson said.

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