By James Atkinson

Diageo Australia has confirmed it has reduced the ABV on Captain Morgan, Smirnoff flavours and Ruski RTDs over the past few months.

Independent retailers say there has been no mention of margin improvement for them under the new regime, which delivers obvious excise benefits to Diageo. 

However a Diageo spokesperson told TheShout the reduction of Captain Morgan Original Spiced Gold ABV from 37.5 per cent to 35 per cent in August was to “bring it in line with the rest of the world”. 

“This has enabled us to significantly increase production for the Australian market to keep pace with the considerable growth we have seen in Captain Morgan Original Spiced Gold over the last 12 months (55.4 per cent MAT – Aztec, October 2014),” she said.

Ruski meanwhile dropped from 4.5 per cent to 4 per cent ABV, the spokesperson said, “while at the same time absorbing the latest CPI increase so we could maintain competitive consumer pricing”.

And the recent relaunch of the Smirnoff flavour range brought with it a “new, more accessible flavour profile” based on a reduced ABV of 30 per cent, down from 37.5 per cent, she added.

“We have also reduced the price of Smirnoff flavours to $32.99 (on promo) to make them more competitive with other lower strength, flavoured vodkas on the market,” the spokesperson said.

She would not comment on Diageo’s margin gain, which independents argue should be fairly shared with all customers, even if they don’t wield the bargaining power of Coles and Woolworths.

“With respect to margins, margins are negotiated with customers on an individual basis and are commercial in confidence,” the spokesperson said.

The Shout Team

The leading online news service for Australia's beer, wine, spirits and hospitality industries.

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  1. I bet we don’t see marketing campaigns explaining the drop in ABV to the consumer. ” We dropped the ABV, so you like it even more” Stop treating consumers like morons and expecting retailers to explain Diageo’s stupidity!

  2. Isn’t this a little backwards, reducing the ABV in order to stay price competitive? What ever happened to the integrity of the juice and selling it the way it was intended?

  3. I think the change of ABV in drinks is also to hit back at the taxing system. If the government would stop being greedy and make a fair tax over the whole alcohol industry (not just tax to high heaven “alcopops” 70% each pack and full strength bottles 75% of each bottle) then the CPI changes and retailers margins would be less dramatic. I think they and all alcohol companies have lowered ABV so that they can prove they are making a positive change in supporting responsible drinking so lay off the bull taxes. Try being a retailer, wholesaler and supplier all fighting for 25% when the politicians sit back laughing and rolling in their taxes of 75%.

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