Letters
to the Editor
18 June 2002 – The Facts on Pre-Mixed Spirits
Mr Charles Coll
Managing Director
Beer Lovers Australia
Dear Mr Coll,
I refer to your ‘Thirst’ column that appeared in the Herald
Sun’s Food and Drink supplement on Tuesday 21 May 2002, in which
you lament “the rise of ready-to-drink (RTD) products” at
the expense of beer.
Whilst I appreciate your passion for beer and the beer
industry, may I draw your attention to your following incorrect claims,
and the subsequent facts, for future reference:
1. “RTDs earn generous tax concessions
not available to beer…”
On the contrary, beer enjoys significant excise concessions not available
to pre-mixed spirits.
Firstly, beer does not pay any excise on the first 1.15%
of alcohol by volume, whereas pre-mixed spirits pay excise on their
entire alcohol content.
Secondly, beer enjoys tiered excise rates with lower rates
for low and mid-strength products, whereas all pre-mixed spirits pay
the same full-strength rate, regardless of alcohol strength.
Thirdly, draught beer enjoys significant excise concessions
not available to draught pre-mixed spirits (such as Bundy and cola
on tap).
As a result, comparable packaged full-strength pre-mixed
spirits pay at least 30% more excise than beer, at least 50% more
in the case of mid-strength products, and 100% more in the case of
low-alcohol products. Further, a pot of draught Bundy and cola pays
about twice the excise of a pot of draught full-strength beer.
2. “…expose the RTD industry
for what it is?
These products are not produced by respected international distilleries…”
Mainstream pre-mixed spirits – which make up the vast majority
of the market – are in fact produced by respected local and international
distilleries, such as Diageo’s Johnnie Walker, Bundaberg, Jim
Beam, Bacardi, Jack Daniels etc.
3. “Surely it’s time for a concerted effort to bring back
the X generation…”
It is a myth that pre-mixed spirits are mainly consumed by young people.
While there has undoubtedly been some growth in the 18-24 market,
it is not the predominant profile of RTD consumers.
Industry survey data consistently shows that the over
24-year-old age group are the main consumers of premix. In fact, approximately
66% of all pre-mixed spirits sold are dark spirits (ie bourbon, scotch
or dark rum), which are predominantly consumed by males over 24 years
of age.
Furthermore, the Roy Morgan Single Source Survey (September
2000 – August 2001) shows that for 18–19 year olds, there
is very little difference (about 2%) between beer and RTD consumption,
but from the 20–24 years old bracket onwards, beer rapidly dominates
their consumption to be about 10 percentage points ahead of RTDs.
Please do not hesitate to get in touch should you require any further
information, or wish to clarify any further assertions before submitting
them for publication.
Yours faithfully,
GORDON J. BRODERICK
Executive Director
