Confusion over alcohol taxes may be remedied if a flat volumetric tax is introduced as part of the election-year budget.

Australia's spirits manufacturing industry supplies less than 40 per cent of domestic demand, with most of our spirits imported.

Revenue from spirits is currently valued at $568.4m, according to IBISWorld, and key industry players include Diageo, Asahi Holdings, Lion, and Coca-Cola Amatil.

Challenges ahead include inconsistent alcohol taxes, and rising concerns about RTD consumption which have led many to voluntarily reduce the alcohol content of some drinks.

The proposal for a flat volumetric tax on all alcoholic beverages has been circulating since the Henry Tax Review in 2010.

With this model, the aim is to reduce complexity and even the playing field between the different alcohol sectors.

IBISWorld senior industry analyst Mr Andrew Ledovskikh found that there are currently a range of various tax rates applicable to alcoholic beverages across 16 different excise categories in Australia.

“Beer and spirits are taxed on an excise system, with rates of taxation varying by the type and strength of the product,” he said.

“However, all wine, as well as traditional cider, is taxed based on its wholesale value.”

Ledovskikh said a flat tax would most likely be equal to the current excise tax rate for full-strength packaged beer.

“Such a proposal is more likely to be the point of discussion over the next month or so as the long-anticipated election-year budget is handed down.”

Growth opportunities include the rise of premiumisation, which is expected to boost demand for pre-mixed cocktail drinks and value-added bottled spirits in the next five years, according to IBISWorld.

Packaging News

It was a full house at Melbourne’s Arts Centre for the annual Food & Drink Business + PKN LIVE breakfast forum, where guests, speakers and an industry panel shared methods, insights and discussions on what it means to be a brave brand.

Brownes Dairy Company will become the first dairy in Australia to move to a fully renewable and recyclable milk carton. It is switching 25 products – more than 17.8 million milk cartons per year – to the new fully renewable packaging format.

Orora has entered into a binding agreement to sell its Australasian Fibre business to a wholly owned subsidiary of Nippon Paper, for an enterprise value of A$1.72bn.