A single vote in the Australian senate was all it took to deal a shock defeat to prime minister Kevin Rudd’s infamous RTD tax, casting doubt on any similar initiatives lined up here.

The Australian senate’s rejection of the tax blows a $1.6 billion dollar hole in the Australian government’s budget, and means the government will now have to return the $290 million dollars it has collected from distillers since its introduction in April last year.

The 70% hike was designed to curb the phenomenal growth of the ‘alcopops’ or RTDs (ready-to-drink) segment, which Labor claimed was aimed curbing young female drinkers bingeing on the sweetened drinks.

Critics rejected it as a (now) failed "tax grab" that has failed to work, and sexist and paternalist at best.

New Zealand lobby groups have mimicked the criticisms, advocating the banning of such drinks, limitations on marketing, availability and pricing structures.

The Maori party and the Greens both pushed for legislation to that effect last year, unsuccessfully.

Realistically, the temptation for youth to simply move to another drink or substance is strong, Lion Nathan's spokeswoman Liz Reid said at the time.

"Put that together with their sensation seeking tendencies, the likelihood that they will find something else as an alternative to higher priced RTDs is extremely high,” Lion Nathan spokeswoman Liz Reid says.

“When they’re buying ready-to-drink single serve items they at least have the benefit of some information, a controlled alcohol level, and knowledge of the aspects of it’s composition.”

Once the bill had passed the house of representatives and came in to force, several local players moved to make RTDs from stripped malt and wine ethanol bases to sidestep the legislation, which also raised issues about the very feasibility of taxing by a specific product, rather than type of alcohol.

Independent Liquor chief executive Doug McKay said at the time it was 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.

The last Labour government was focused on the liquor issue after a series of crimes saw its scapegoating of alcohol labelled as the ‘new P epidemic.”

Then Justice minister Lianne Dalziel commissioned former prime minister Geoffrey Palmer to oversee a law commission review of the sale of liquor, which is still in progress.

The law commission is due to release a public discussion paper of its recommendations on July 31, which will frame the issues under discussion.

The main focus will be on:

-    Tax levels
-    Drinking and purchase ages
-    Availability; such as number and type of liquor outlets
-    Drinking hours
-    Liquor advertising
-    Law enforcement; including drink-driving levels.

The final report is due in June 2010, for possible government bill introduction by the end of that year.