13 May 2008
The Federal Government has announced that from 27 April 2008 there will be additional tax on Ready-To-Drinks (RTD’s).
This includes mixed spirit products such as Bacardi Breezers, Jim Beam and Coke and Smirnoff Ice. It will be levied on domestic and imported products.
The tax increase will be volumetric, meaning that the tax is on the amount of alcohol in the product. Generally speaking, the less alcohol in the product, the less tax and the cheaper the product can be sold.
This change will bring the tax on alcohol in RTDs up to the same level as the tax on pure sprits, from about $39 per litre of pure alcohol to about $67 per litre.
The Federal Government has increased the tax because it claims that underage girls drink proportionately higher volumes of RTDs and argues that they are price sensitive. It is important to note that there is no suggestion underage people are consuming these products in clubs, however clubs will be affected by the tax increase.
As with existing alcohol taxes, it will be levied on manufacturers and importers and passed on through the chain to retailers. That means existing stock can be sold at the existing price. Purchases of new stock will have the tax levied.
Clubs are advised to check invoices on these products at this time so they can review their margins and pass on the tax as appropriate.