In this week’s instalment of citizen journalism, Diageo external relations manager, Ailish Hanley, explains why the distributor has opted to defy the Federal Government with its upcoming foray into beer-based RTDs
“Diageo has a strong track record of promoting responsible drinking through responsible marketing and consumer awareness programmes. We are proud that our marketing code is the most stringent of any alcohol producer and is recognised by government and community stakeholders across the world.
The Government’s decision to increase the excise (tax) charged on RTD products in April established an inequitable tax regime for alcohol beverages. The tax now charged on a one standard drink serve (3.5 per cent ABV) of RTD is 84 cents, while the tax charged on a one standard drink equivalent beer product is only 33 cents.
This is clearly an ineffective and inequitable tax regime that favours beer and wine products, while penalising spirits-based RTD consumers and producers. This regime effectively motivates producers to innovate into beverages based on alcohol sources other than distilled spirits.
Our RTD products are built on strong trademarks that consumers continue to demand despite the current inequitable tax regime. We have a strong and continuous innovation pipeline driven by consumer demand and market opportunities. We have a clear policy where we only produce single serve beverages of no greater than the equivalent of two standard drinks, in line with the National Drink Guidelines. Our commitment is to continue to innovate and produce high quality branded beverages that comply with all legal requirements and which are marketed responsibly.
We continue to believe that a volumetric tax system that recognises that all alcohol is alcohol and is based on the alcohol content (or ABV) of a product, rather than the type or categorisation of a product, is the most equitable and effective approach. This would bring transparency and credibility to an alcohol tax regime that currently appears to have no underpinning logic to it."
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