The New Zealand Alcohol Beverages Council (NZABC) has announced changes in beverage taxes that will impact consumers, producers, and hospitality businesses.
New data from the NZABC shared Consumer Price Index (CPI) for alcoholic beverages, including wine, beer, and spirits, has increased by 6.7 percent.
“The 6.7 percent rise in the CPI is used as a benchmark to increase the excise tax on beer, wines and spirits. The excise tax was 1.24 billion NZD in June 2022 and is forecast to be 1.4 billion NZD the following year,” revealed NZABC Executive Director Virginia Nicholls.
“This will mean an extra 160 million NZD in new taxes, which are paid by producers and, ultimately, consumers. In this time of rapid inflation and a cost of living crisis, extra taxes are tough to absorb.”
Excise is a duty imposed on locally produced and imported beer, wine, and spirits products.
The annual excise tax adjustment is based on movements in the CPI (up until 31 March 2023) and starts on 1 July 2023.
Nicholls explained that the continued pressure from inflation of various industry practices, including ingredient and packaging costs, skill shortages in the sector and higher interest rates, has meant that the increased excise tax will likely be transferred to consumers. Nicholls added the recent flooding and cyclones have also impacted these rising prices.
“It is not well known that most beer, wine and spirits producers, hospitality providers and retailers are small and medium-sized businesses.”
The wine, beer, spirits, and beverages industry provides many needed jobs, including entry-level opportunities in every small town, city centre, and suburb. This is spread across 1,865 small, medium, to large businesses.
Nicholls added that over 10,000 directly employed within the industry work various jobs, ranging from orchard work, winemaking, brewing, and distilling, to manufacturing and packaging, transport, retail, and more.
Indirectly within the industry, 20,913 Kiwis are also employed.
The industry also sustained a productive and innovative domestic market and a growing export market. The Executive Director revealed that only half (50 percent) of Kiwis realised that in addition to GST, there is an excise tax on beer, wine and spirits.
