Aussie alcopop tax reignited
The Australian government’s quest to continue slapping a huge tax on alcopops is not yet over, and it has 365 million reasons - so far - to ensure that quest is a success.
It has two more sitting days of parliament to pass a retrospective law in favour of the tax, which has crippled the profits of liquor companies like Independent Liquor.
Liquor producers have been battling the 70% tax hike since it was introduced last April.
Since then, the government has pocketed an additional $A365 million in tax revenue on alcopop sales.
But the legislation required to allow this has never actually been passed. The deadline for this to happen is a year after the idea was first put to the House of Representatives, on budget night (May 13) last year.
It was defeated in the Senate by one vote last month but today, Health Minister Nicola Roxon says the government has not given up on getting the law passed.
It has two more sitting days – May 12 and May 13 – to pass retrospective legislation justifying the money it has collected so far.
It also plans to introduce a new tariff proposal with effect from May 14, to ensure that the alcopops measure remains in place.
Independent Liquor was founded by New Zealander Michael Erceg and purchased by private equity firms Pacific Equity Partners and CCMP Capital Asia $1.26 billion after Mr Erceg’s death in a helicopter crash.
It has never publicly disclosed how much money the tax costs the company but it is speculated to be a large amount, as the higher price of alcopops encourage consumers to switch to other products.
Independent Liquor chief executive Doug McKay has said it is unfair to tax the drinks at a rate comparable to full strength spirits as it they had just 5 per cent alcohol, the same as beer.
About 60 percent of Independent’s sales are made in Australia.