Price of popular cask wine may triple under tax change proposals

THE price of popular wine casks will rocket from $12 to more than $37 if Treasury recommendations on alcohol taxation are realised in the budget.

The Henry review of Australia's tax system suggests that alcohol should be taxed uniformly by volume, which would triple the cost of four- or five-litre cask wine and double the price of trendy two-litre boxes, according to wine industry forecasts.

Any move to change the system of taxing wine, beer and spirits at different rates would cause low- and fixed-income as well as older Australians to turn away from their 180-million-litres-a-year thirst in favour of other alcoholic beverages.

Severe effects were predicted on already hurting inland wine regions, Wine Grape Growers Australia chief Mark McKenzie said yesterday. Cask wine accounts for 40 per cent of all wine sold in Australia.

"With many growers already reporting their industry's worst economic conditions in living memory, a move to volumetric tax would be an unmitigated disaster for regions like the Riverland, Murray River Valley and the Riverina," Mr McKenzie said.

The alcohol taxation review changes, believed to be part of the Henry report to Treasury, have been instigated to simplify the current complex three-tiered system, as well as lower alcohol intake by raising prices, while raking in an expected revenue increase of $237 million.

But wine industry experts have argued there will be little change in public health outcomes, given that more than 70 per cent of all cask drinkers are aged over 60.

Winemakers Federation of Australia boss Stephen Strachan said industry modelling showed there would be a loss of up to 12,000 jobs if a projected 34 per cent drop in consumption occurred because of the price rises.

"It's the biggest kick in the guts you could give to a grape grower at the moment," he said.