Jan McLucas (Queensland, Australian Labor Party, Parliamentary Secretary to the Minister for Health and Ageing) Share this | Hansard source

You might think it is funny, Senator. This is the data which your side say does not exist. The industry itself admits its sales have grown by 250 per cent since 2000. So the Rudd government has made the entirely sensible decision to reverse the Liberal Party’s mistake. The government’s decision leads to the logical situation that all spirits, whether bottled or premixed, are taxed at the same rate. As a result, the price of most alcopops has increased. Research shows that price increases can and will play an important role in tackling binge drinking and that higher prices lead to a reduction in consumption, particularly by young people and underage children.

This bill changes the definition of beer to set a combination of minimum limits on bitterness and maximum limits on sugar content that must be present in the final beverage. As part of the sugar requirements, artificial sweeteners will not be permitted to be added to beer. Apart from establishing new restrictions on the definition of beer, the government has also taken the opportunity to make changes that encourage innovation in the beer-making process. The changes will allow additional ingredients to be added during the brewing process, including small amounts of alcohol from a non-beer source. These changes are expected to allow domestic brewers to better compete with international brewers by providing opportunities to produce new beer flavours within the overall new limits concerning bitterness and sugar content.

The changes will only affect grape wine products and not other forms of wine. The category known as ‘grape wine products’ currently includes wine cocktails, flavoured wines and Irish style cream drinks, including wine creams. With a combination of flavourings or ingredients, a grape wine product could be produced to resemble a spirit based RTD product. The new definition will preclude the addition at any time of the flavour of an alcoholic beverage other than wine whether the flavour is natural or artificial and whether or not the flavour contains alcohol. For example, the addition of a rum flavour or a number of flavours that combine to produce a rum flavour would lead to the beverage no longer being classified as wine. Supporting this change, other changes to the definition will act to provide certainty as to the circumstances where alcohol can be added to a grape wine product—that is, alcohol other than grape spirit used in the preparation of the vegetable extract must not add more than one percentage point to the final alcohol strength by volume of the beverage. Without such a limit, additional amounts of alcohol could be added to a grape wine product potentially to provide a spirit flavour. These changes are not designed to have any significant impact on conventional beer and wine products. The government understands from consultations that both the beer and wine industries are supportive of the changes.

Subject to the support of the parliament, the new definitions of beer and wine will apply from 1 July. The 1 July 2009 start date has been chosen to provide sufficient time for industry to be informed of the changes and to make any adjustments. I acknowledge your question, Senator Birmingham. We will deal with that in the committee stage.

The Australian Taxation Office and Customs figures drawn from the first 10 months of this measure show that alcopops sales have dropped by 35 per cent compared to the previous year. This is significant. What is more, it is far beyond our modest predictions. When the measure was first introduced, modelling predicted that—