New Zealand: Call goes to government to reduce taxes on low alcohol beer

A call has gone out for the New Zealand Government to reduce the amount of tax on low alcohol beer, Stuff.co.nz reported on April 4.

Research by the Food and Grocery Council found that 58 per cent of people believe sales of low alcohol beer would increase if it was made cheaper than full strength beer.

The survey asked more than 1100 people about their attitudes towards beer containing 3 per cent alcohol or less.

The definition of what makes a low alcohol beer varies widely.

Under the Australia New Zealand Food Standards Code, low alcohol beer must contain less than 1.15 per cent alcohol while under the Advertising Standards Authority rules light beer must be less than 2.5 per cent alcohol.

However, the brewing industry widely considers light beer to be below 3 per cent alcohol.

Supermarket data last year showed sales of beer below 3.4 per cent increased by more than 60 per cent in the year to November 1, albeit from a base of about 1 per cent of total beer sold.

Food and Grocery Council chief executive Katherine Rich said low-alcohol beer played an important role in moderating alcohol consumption.

"If the Government's aim is to reduce harm in the community then it makes sense it could look at low-alcohol beers attracting a much lower tax than full-strength beer," Rich said.

Beer stronger than 2.5 per cent alcohol has an excise duty rate of $28.32 per litre of alcohol.

Beer less than 2.5 per cent in alcohol volume but greater than 1.15 per cent has a different excise duty rate applied to the overall litres of beer, not its alcohol content - currently 42.47 cents per litre of beer.

Rich said New Zealand's tax rate on low-alcohol beer was "way out of alignment" with taxes in Australia and Britain.

"Excise taxes are big revenue earners for governments so I doubt there's much appetite for change."

New Zealand's high taxes were hard to justify and reducing excise tax on low alcohol beer would encourage more brewers to develop new offerings, Rich said.

Of respondents who drank alcoholic beverages, 38 per cent said they would be likely to drink low alcohol beer more often if more options were available.

About 4 per cent of total beer consumed in New Zealand was low alcohol compared to 20 per cent in Australia.

Taste was the primary reason why respondents who drank alcohol did not drink more low alcohol beer.

06 April, 2016