Wine industry warns jobs at risk from tax hike on alcopops

THOUSANDS of jobs are at risk under plans to extend the tax hike on pre-mixed drinks to other forms of alcohol, the Winemakers' Federation warns.

Former Coalition health minister John Herron _ who now heads the National Council on Drugs _ has written to the Prime Minister welcoming the 70per cent tax increase on alcopops and urging him to go even further in lifting alcohol taxes.

"Utilising the taxation system is one of the most effective measures we have for reducing alcohol-related harm and problems for both individuals and communities," Dr Herron wrote.

The idea is now set to go before the Federal Government's promised "root and branch" review of taxation.

Both the Alcohol Education and Rehabilitation Foundation and the Distilled Spirits Industry Council of Australia say they will make submissions to the review, arguing for an end to the disparate systems for taxing beer, wine and spirits.

They will argue all alcohol products should be taxed according to how much alcohol they contain _ a move which would force up tax on wine.

Opposition treasury spokesman Malcolm Turnbull at the weekend described the alcohol tax regime as "full of anomalies and inconsistencies and contradictions".

He said the Coalition's review of taxation would consider plans for a fairer alcohol tax system.

Winemakers Federation of Australia CEO Stephen Strachan said any move to create parity by raising wine taxes would be very costly.

"The reality is that spirits in Australia are taxed at a phenomenally high level and from the winemakers' perspective, we don't care to be compared to their tax levels," he said. "If it was ever done to our industry, it would have a massive impact _ thousands of jobs."

The Federal Opposition has continued to argue the Government's decision to lift pre-mixed spirit tax would see young drinkers switch to cheaper forms of alcohol.

But Health Minister Nicola Roxon said young drinkers preferred alcopops as the pre-mixed drinks were designed not to taste like alcohol.

"We don't think there will be a simple change-over because we know many young people don't like the straight taste of beer and alcohol," she said.

May, 19 - 2008

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