Sober N Clean

THE maker of leading alcopop brands such as Vodka Cruiser and Pulse has found a way around the tax on premixed drinks: using alcohol derived from lower-taxed beer to attract younger drinkers back to the sweet stuff.

The arrival of the first Australian "malternative", as they are dubbed overseas, comes as nationwide alcohol consumption figures obtained by the Herald show the tax rise on ready-to-drink beverages in April is having a massive impact on sales and the broader consumption of alcohol.

The number of standard drinks consumed each week has fallen by 3 million since the alcopop tax rise, says a confidential report sent this week to key players in the alcohol industry by the research group Nielsen.

Leading suppliers in the once booming premixed category have been stunned by the collapse in sales since May, a trend confirmed in Nielsen's figures this week, which show there were 7 million fewer premixed standard drinks consumed between May and July compared with the same time last year.

While the figures show spirit and beer consumption is up, they have not offset the overall decline in alcohol consumption led by the stampede away from premixes.

"The total number of packaged liquor standard drinks has declined at a faster rate since the introduction of the [ready-to-drink] tax increase," Nielsen says.

The Federal Opposition has said it will block the tax in the Senate.

While premixed drink sales are down 26.2 per cent, spirits are up by 2.9 million standard drinks a week over the same period and beer is up by 1.1 million standard drinks a week.

But Nielsen's figures show the increase in beer and spirits consumption is still 3 million standard drinks less than the same time last year.

And it is why some in the spirits industry are very worried about disappearing profits.

One of the biggest players, Independent Distillers, told the Herald yesterday that it was about to launch Bolt, a "malternative" in three sweet flavours - raspberry, passionfruit and blueberry - designed to appeal to younger drinkers.

Bolt will be up to $25 a carton cheaper than spirits premixes because it is made with alcohol derived from beer - with all the beer taste characteristics stripped out during production.

A spokesman for Independent Distillers said it was not using a loophole in the new tax regime to launch a cheaper type of premixed beverage, but said it highlighted the problems of taxing spirits at a higher rate than beer.

Packaged beer is taxed at $39.40 a litre of pure alcohol while ready-to-drink beverages carry an impost of $66.70 a litre of pure alcohol.

Critics, however, said the "malternatives" and spirit premixes were developed to exploit the sweeter taste preferences of younger people and needed higher taxes to deal with social issues such as binge drinking.
RISE AND FALL

Since the alcopops tax increase:

- Sales in bottle shops have dropped by 7 million standard drinks a week, or 26.2 per cent

- Spirit sales have risen by 2.9 million standard drinks a week

- Packaged beer sales have risen by 1.1 million standard drinks a week

- Total liquor sales have fallen by 3 million standard drinks a week.
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Source: Nielsen

This story was found at: http://www.smh.com.au/articles/2008/09/15/1221330747912.html