By Andrew Starke
With the Federal Government planning to set a floor price for alcohol, Winemakers' Federation of Australia (WFA) chief executive, Stephen Strachan, explains why research suggests this is a mistake.
“The speed with which the idea gained publicity and traction last week reinforces our concern that despite countless hours of research into the social problems linked to alcohol the only answer that ever emerges is to make it more expensive.
Research shows price isn’t a disincentive because heavy drinkers have an inelastic demand for alcohol.
They will keep buying it – using even more of their income to do so – while the great majority of moderate drinkers will either be unfairly forced to pay more or will do without.
Minimum pricing may not technically be a tax, but it would have the same impact on the wine industry and consumers without solving the problem that motivated it.
The great myth of wine casks is that they are only drunk by hardened drinkers and the young, when the opposite is in fact true.
Research WFA commissioned from Wine Intelligence shows that nearly half of those who buy four-litre casks and 38% who buy two-litre casks are aged over 55 and around 40% earn less than $50,000 a year.
And the majority only have 1-2 glasses at a sitting – well within the recommended guidelines.
In other words, pensioners buy casks for their nightly glass with dinner because they are convenient and affordable.
There are clearly issues with indigenous abuse of cask wine in the Northern Territory, but as with all such problems targeted initiatives rather than hopeful broad-brush solutions are needed.
While acknowledging that this issue was raised in a rather ad hoc manner this week, it is still disappointing that no mention was made of the fact that winemakers already are collaborating with NT authorities to directly confront the abuse of cask wine, not by artificially increasing the price but by restricting its availability.
Four-litre casks are now banned throughout the NT, there are various restrictions on two-litre casks and all casks are banned in a number of communities.”