Australia: Weaker beer to save Foster’s millions in tax

The alcohol content of high-selling Australian beer Victoria Bitter will be cut slightly in a move that will save brewer Foster's up to A$20 million ($22.2 million) a year in tax payments, AAP reported July 4.

News Limited today reported the alcohol content of the iconic Melbourne-brewed beer would be cut from 4.9 per cent to 4.8 per cent to cut the amount of excise Foster's pays on the beer it brews.

In general, the higher the alcohol content in a beverage, the higher the excise tax that has to be paid. Changing the blend to fall just below a tax threshhold can result in significant savings.

Foster's spokesman Ben Wicks said the change would not affect the taste of the beer.

"It certainly doesn't affect the taste, which is very important to our VB drinkers. The taste will stay exactly the same. Our master brewers have done a lot of work to make sure of that," he told News Limited.

Industry analyst Mark Bowles said the "significant saving" the brewer would make would be re-invested into the brand, particularly its mid-strength VB variety and its annual summer promotion involving collectible figurines.

"Our estimate would be that they could save potentially between A$10 million and A$20 million," he said.

The lower-alcohol Victoria Bitter would arrive in shops next month.

But the price of Foster's beers was set to rise next month, based on CPI and increased production costs.

Here's the alcohol-per-volume content of a sample of popular New Zealand beers:

Lion Red 4 per cent alc/vol
Export Gold 4 per cent alc/vol
Steinlager 5 per cent alc/vol
Monteith's Black 5.2 per cent alc/vol

04 July, 2007