Justice Minister Judith Collins says the Government could consider future rises in the alcohol excise tax by as much as 50 per cent.
Speaking this morning on Q+A, Ms Collins did not rule out future consideration of the Law Commission's recommendation that the Government increase the excise by 50 per cent.
"Well that's something we might do in the future but I also think that you need to look at the fact that we are not trying to actually stop all alcohol sales in this country," Ms Collins said.
She said the Government was working to reduce the harm of alcohol and said an expert panel would offer advice about health warnings on liquor ads.
When asked about the Chief Coroner's call for health warnings to be put on bottles of alcohol, similar to tobacco packaging, a couple of years ago, Ms Collins said the Government was "working through" it.
She said she supported the move but warned it might have limited impact.
"Well, I think it's not an unreasonable call. I just bear in mind that often these warnings can easily be overlooked because the person who's pouring the drink isn't necessarily the person who's drinking the drink, if you know what I mean," Ms Collins said.
The National MP predicted the split purchase age for buying alcohol would pass Parliament, but only narrowly.
Ms Collins said she was in favour of the 18-20 age split.
"I think that if we take it (the legal drinking age) to 20 we are being unrealistic, particularly with so many students being 18, 19, and I think back to when I was that age. And we were, at that age, drinking in pubs when it was clearly outside the law," Ms Collins said.
"But we were in a controlled environment where we had people who wouldn't serve alcohol to anyone who was intoxicated and it was a much more safer environment than in the back seat of a car somewhere or down at the beach.
"However, I also think that 20 is a good age for someone to be able to buy alcohol outside of that very controlled environment. And also 20-year-olds don't normally associate with 16-year-olds. Plenty of 18-year-olds do associate with 16-year-olds, and it's also about limiting the options or opportunities for supply of alcohol to people under the age of 18."
Labour's associate justice spokeswoman Lianne Dalziel said the Government was failing to address alcohol abuse and was using the conscience vote on drinking age as a smokescreen.
"There's no way that 18- and 19-year-olds are causing all the problems we are confronted with today. Just tackling the age isn't going to cut it when it comes to real alcohol reform,'' Ms Dalziel said in a statement.
She said the Government had failed to adopt many of the Law Commission's recommendations for a "comprehensive proposal for change''.
"We must deal with the issue of easy access to cheap alcohol and the normalisation of alcohol, reinforced by clever marketing and a drink driving limit that lets people drive when they are intoxicated. None of these issues are addressed in the proposed legislation,'' Ms Dalziel said.
"The minister must have the courage to do what is right not just what is popular."