29 Apr 2010

Wine growers relieved alcohol tax unlikely to rise

9:21 pm on 29 April 2010

The national wine industry body is relieved at the advice from the Government that it's not proposing to raise the excise tax on alcohol.

A Law Commission review of the liquor laws had recommended increasing the excise on alcohol, but the Government has indicated that is highly unlikely.

New Zealand Winegrowers policy manager John Barker says hiking the excise tax on wine by 50%, as suggested, would put wineries at risk.

He says it is difficult in a competitive environment to pass on costs to retailers, so the tax is, in effect, paid by the winery.

Dr Barker points out that increases in the tax in line with inflation have totalled 60% over the last 20 years.

He says when the Government significantly increased the excise tax on fortified wines such as sherry and port a few years ago, it forced many of those producers out of business because they couldn't afford to pay the tax.