Australia: Alcopops Legislation Finally Bubbles Through Australian Parliament

Last Updated: 21 August 2009
Article by Andrew Hudson

Tariff Proposals – Taxation without legislation

Readers would be aware of the long-standing methods adopted by successive Australian Federal Governments to effect changes to rates of excise and customs duties before implementing legislation is introduced and passed. This is carried out first by notices of intention to alter the rates in the Government Gazette pursuant to section 160B of the Excise Act 1901 and section 273EA of the Customs Act 1901. Secondly, the new rates are then collected by "Tariff Proposals" introduced in Parliament. The provisions allow a period of time for the Parliament to pass the legislation to formally implement the Tariff Proposals during which period excise and customs duties are collected at the rates announced in the Tariff Proposals. Although these provisions have been subject to consideration by the High Court many years ago, the methods described above have traditionally worked without contention. However, past practices were challenged when the current Australian Federal Government announced in 2008 significant increases to rates of excise and customs duty on beverages known as "Alcopops" or "Ready to Drink" beverages defined as "other excisable beverages not exceeding 10% by volume of alcohol" not being beer or wine. There was significant Parliamentary opposition to the 2008 proposals which threatened the continued collection of the higher levies.

Background to the current issue

Our E-alerts of 14 April 2009 and 5 May 2009 refer to successive judgments of the Federal Court which effectively endorsed the approach by the Australian Federal Government to collect (and continue to collect) increased levels of excise and customs duty on "Alcopops" based on the 2008 "Tariff and Excise Proposals" ("Past Measures") referred to above.

The Parliament subsequently passed "validating" legislation to validate collections of excise duty and customs duty according to those Past Measures even though the original associated legislation did not pass.

However, by virtue of new measures (described below), the Australian Federal Government is now formalising its approach to the collection of increased levels of excise and customs duty on "Alcopops" and other products manufactured to be similar to "Alcopops".

New Measures introduced by new legislation

As discussed above, the Australian Federal Government has subsequently introduced new measures ("New Measures") being the Excise Tariff Amendment (2009 Measures No. 1) Bill 2009 and the Customs Tariff Amendment (2009 Measures No. 1) Bill 2009. The New Measures were introduced to legislate the effect of earlier Excise Tariff Proposal (No. 1) 2009 and the Customs Tariff Proposal (No. 3) 2009. The relevant Explanatory Material refers to the New Measures forming part of the Australian Federal Government's strategy to discourage binge drinking by increasing the prices of "Alcopops" and "Ready to Drink" beverages. As readers would also be aware, there is also a significant increase in revenue to Government from these New Measures.

Intent of the New Measures

The New Measures seek to effect the following main outcomes.

Legislate increased rates of excise and duty

Increase the excise and duty rates applying to "other excisable beverages not exceeding 10% by volume of alcohol and the excise-equivalent rates of customs duty applying to their imported equivalents" to $69.16 per litre of alcohol content on and from 14 May 2009. This would be subject to review at the expiry of six month periods.

Change the definition of beer and wine

To change the definition of "beer" and "wine" which are manufactured to mimic the effect of "Alcopops" or "Ready to Drink" beverages but would otherwise have been excluded from the effect of the New Measures as being "classified" as "beer" and "wine". For these purposes, "malternatives" made from beer mimics spirit-based "Alcopops" in terms of their taste and marketing. Similarly, grape wine products based on wine can mimic the spirit-grape content of "Alcopops" by addition of other flavours.

For these purposes, the definition of "beer" will set a combination of minimum limits of bitterness (based on minimum international bitterness units) and maximum levels on sugar content (4% by weight of sugar or equivalent in artificial sweetener) to be present in the final beverage otherwise they will be considered not to be beer and subject to the higher rates of excise and duty. Further, the definition of "grape wine" will preclude the addition of flavouring of any other alcohol or flavour (other than wine) whether or not that flavour includes alcohol.

Warning, these new definitions are complex

Please note that the commentary above is only a brief summary of the relevant provisions. The new definitions of "beer" and "wine" are extremely complex and will require close attention to determine whether particular beverages are, indeed, "beer" and "wine" or are other types of beverages which will attract the higher rates of duty and excise.

We would be happy to assist with any such review. However, readers should be aware that some assistance may be required from experts with experience in the distilling and production of such beverages to ensure that they are properly characterised.

Status of legislation of the New Measures

The relevant legislation has now passed through both Houses of Parliament. The legislation will only commence once the Acts have received Royal Assent. We will keep you informed of developments in this context. However, in the meantime, current arrangements for payment of the higher rates of excise and customs duty based on the prevailing Tariff Proposals should be observed.

Need to review and act!

Readers would be well advised to carefully review the relevant legislation to determine whether relevant products being imported or produced in Australia are subject to these New Measures.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
 
Related Articles
 
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions