Alcohol prices set to rise as tax increases

By Imogen Neale

A quiet drink with mates will be more expensive from today as excise taxes on alcohol increase almost 3.5 per cent.

Excise tax, sometimes called excise duty, is a type of tax charged on goods produced within New Zealand.

DB Breweries, which produces Tui, Monteith's and Heineken, will raise prices by an average of 5.5 per cent for a pack of beer and 5.3 per cent for tap beer.

Lion Nathan, producer of Speights, Lion Red, Mac's and Steinlager beer, will also raise prices by an average of 5.5 per cent.

Spirits and ready-to-drink beverages will also reportedly rise, by around 5.3 per cent.

A slightly smaller price hike faces wine drinkers - wine sold by Lion Nathan, which includes Wither Hills, will rise by approximately 4 per cent.

DB Breweries do not produce wine.

Liquor companies are blaming commodity prices for the price increases, saying the cost of malt has soared 50 per cent in the past year.

Hospitality Association of New Zealand chief executive Bruce Robertson said the industry had been reluctant to apply the price increases because of the stretch in the dollar but they "don't have a choice".

"We've had significant other increased costs: rent, energy, labour costs - we need to recover that" he said.

Manurewa MP George Hawkins said he didn't think the price increase would have very much impact at all.

"To have a real impact it would have to go up a lot more than that," Hawkins said.

He said people had managed to keep putting petrol in their cars and he imagined alcohol consumption would be the same.

Alcohol Advisory Council (ALAC) chief executive Gerard Vaughan said the cost of alcohol plays an important part in people's drinking habits.

Young and heavy drinkers are particularly price sensitive, he said, and an increase in price might lead to a reduction in consumption and a subsequent reduction in alcohol-related harm.

However, Mr Vaughan said the availability of cheap alcohol is still particularly concerning.

"It will be interesting to see if those retailers absorb the cost and continue to sell alcohol at prices that are sometimes below cost or in fact raise prices and pass the increase onto their customers," he said.

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