Financial stakes high as liquor bill targets RTDs
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The most contentious part of the proposed new liquor legislation has come down to a few drops of alcohol in ready-mixed spirit drinks (RTDs). But in dollar terms, the stakes are high.
Top-level lobbying last week saw the heads of four multinational spirits companies – Bacardi, Beam, Brown-Forman and Diageo – meet Justice Minister Judith Collins, who is responsible for the Alcohol Reform Bill.
Submissions from the industry, which also includes Lion and Independent Liquor as large makers and distributors of RTDs, have so far managed to up the bill’s proposed maximum level of alcohol allowed from 5% ABV (alcohol by volume) to 6%.
Higher strength drinks would still be permitted in bars and restaurants.
But the ban on selling the higher alcoholic strength drinks or in amounts more than 1.5 standard drinks through liquor stores remains. The industry has imposed a self-regulated limit of two standard drinks per container.
RTDs make up about 12% of the total alcohol consumed and up to 180 million cans or bottles are sold each year. More than half of these are above 6% ABV.
The proposed limits cut out stronger drinks that are among the top sellers, such as Independent Liquor’s Woodstock Bourbon & Cola, which sells equally in 5% and 8% versions.
Interestingly, the biggest consumers of the stronger version of this drink are male tradesmen, not young women.
The higher ABV end of the RTD market is fiercely contested by premium spirits brands such as Beam, which offers 7% and 8% ABV Jim Beam mixed drinks.
The main argument against an arbitrary limit on RTDs to the level of premium-strength beer is “substitution” – where drinkers who prefer a higher alcoholic content in their drinks are more likely to move to buying bottles of neat spirits and mixing their own.
The result, according to industry research and surveys here and overseas, will be to increase the overall consumption of alcohol. “Instead of fixing the problem [of alcohol consumption] it will only get worse,” one industry advocate says.
The companies also say the 6% limit unfairly targets just one part of the industry and is also a breach of international trade laws.
Such breaches appear to cut little ice with many of the bill’s supporters, who say they are mainly concerned with access by younger drinkers to low-priced wine that has high alcoholic levels (10% and above) and the higher-strength RTDs.
But the debate will continue with individual MPs being lobbied as many of the bill’s measures are the subject of conscience voting.