Tax on wine

By Ian Hickinbotham
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Regional cheeses and wines on Victoria's Mornington Peninsula

Regional cheeses and wines on Victoria's Mornington Peninsula

Ian Hickinbotham, author of Australian Plonky


The old chestnut is topical again: the common theme seems to be – tax on alcoholic beverages should be a volumetric tax so binge drinking in Australia would decrease and specifically, the resulting increased purchase price of ‘table-cask wine’, would drastically decrease alcoholism.

I admit to being enthused by the historical aspects of wine. It was of critical importance to the ancients, being a ‘safe’ drink. Further, since it really is the juice of a fruit fermented it has always had nutritional value. (Currently, its health value is often enhanced by makers using the permitted additive, vitamin C, to new wine for better retention of freshness of flavour.) Literature is obscure as to how long wine has been made, research varying between three and ten thousand years, so all together, perhaps I am an ‘oenological romantic’.

Winegrowers have always been quick to point out that wine is made from grapes that must first be grown, which translates into a decade of time, more time for wine aging, labour and considerable investment, whereas a brewer starts with water and builds.

However, it is immediately obvious that table wine (which could be seen to be ‘the beverage’ in question), has an alcohol content of 12 to 14% (and rising because of Global Warming – it was 40ºC in Burgundy recently) meaning that pure alcohol is 12 to 14% of the volume in a bottle. Ordinary commercial beer has about a third of that alcohol.

Winegrowers also espouse that ‘alco-pops’ are the drink of ‘binge drinkers’ who are dominantly young people, not wine, and there are relevant statistics. (Alco-pops are spirits, which are basically the distillate of ‘beer’, to which sugar and flavours, usually artificial, are added plus gas from a cylinder.) They are cheap to make, but currently attract a high tax rate, arguably, just because they are the preferred drink of those same young people.

It has been reported that a National Alliance for Action on Alcohol that has representatives from 55 ‘welfare’ organisations is demanding, according to one report, that a 30% increase in the price of cheap wine would cause a fall of about 5% in wine production. This blunt statement does not seem to understand that there is a gross over-supply of wine currently and it takes some 10 years to bring a vineyard into production. A counter claim by the wine industry’s peak body that thousands of jobs would be lost has been disputed, while the alliance has now been challenged by leading scientists (importantly, not doctors).

‘The French Paradox’ was a much publicised observation emanating from Bordeaux University that seemed to turn on the basic statistics that in 2002 Americans ate 72 grams of fat a day whereas the French averaged 108 grams a day, ate 60% more cheese, three times as much pork yet suffered fewer heart attacks because they drank so much red wine. Now this explosive finding is also being questioned!


Acknowledgement: Your Daily Wine News


Ian Hickinbotham, one of the most innovative and influential oenologists in Australia over his 50 year career, is the author of Australian Plonky (see related reviews below).



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October 14th, 2011
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