By Ian Neubauer
The Federal Government will carry out a threat to close the loophole on malternatives by changing the definition of beer and wine.
Malternatives – a flavoured beer sub-category that taste and look like RTDs — began appearing en masse in the marketplace in September last year as manufacturers sought ways to circumvent a tax they said penalised spirit drinkers.
But the new definition, as outlined in the 2009 Federal Budget, will ensure beer- and wine-based products that attempt to mimic spirit-based products are taxed as a spirit product.
“The definition of beer will be changed to ensure that beer has a certain level of bitterness and to clarify that the addition of sugar, artificial sweeteners and spirits may result in the resultant product being taxed as a spirit based product,” the Government announced in its budget overview.
“The definition of grape wine products will be changed to exclude products that add the flavour of any alcoholic beverage, other than wine. Other changes to the definition of grape wine products will act to provide certainty as to the circumstances where alcohol can be added to a grape wine product.”
The measure will go into effect on July 1. It is expected to raise an additional $125 million over the forward estimates period.