No more Australian cheap wine?

Posted by Martin Field on 19 December 2012 in Wine

Cask wine drinkers be afraid – it seems that the era of cheap wine could be at an end in Australia. Ongoing media reports suggest that the federal government remains under pressure from lobbyists to raise taxes on wine. If this happens it could mean that a four-litre cask (bag in a box) of wine that currently costs around $14 could cost over $50, and the cheapest bottle of wine, $8 to $10.

There seem to be two main arguments for the rise in taxes. The first assumes that cheap wine is the main cause of alcohol abuse and that a price increase would reduce this. The second is that wine is taxed at a lower rate than beer and spirits and that for reasons of uniformity it should be taxed at the same rate as other beverages.

Politicians, who probably never drink cask or cheap wine, will be attracted by both arguments, especially the financial one. As cask wine accounts for some 50 percent of wine sold in Australia, a new wine tax could raise over a billion dollars in extra revenue.

The problem is that making cheap wine more expensive is unlikely to prevent alcoholism, binge drinking and other alcohol misuse. For example, even the total prohibition of alcohol in America in the 1920s failed to abolish excessive alcohol consumption. In fact it had the opposite effect and created an industry of widespread illegal drinking and related criminality.

Another factor apparently not considered by lobbyists is that substance abuse is not a price issue. Like other addicts, alcoholics and binge drinkers will over-indulge in wine and other alcohol no matter what the cost.

To my knowledge the great majority of wine drinkers in Australia are moderate users who use wine as part of the dining experience and even enjoy an occasional glass of cask vin ordinaire. In my opinion they should not be penalised as a consequence of the activities of a minority of problem drinkers. Further, the people who will suffer most from a proposed tax increase are not abusers but those who cannot afford to buy expensive wine.

If the wowsers and do-gooders have a win on this one, next thing they will demand is tobacco type restrictions. That is, the introduction of graphic warnings and plain packaging on alcohol.

Tags: alcohol abuse, alcohol tax, Australian wine, bag in box wine, cask wine, cheap wine, wine taxation

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