After 50 years, it’s time to say goodbye to cheap wine casks

Charles Perkins, who led the Freedom Ride to protest against racial injustice against Aboriginal people in 1965, was the Australian Prime Minister. On April 20, the company of winemaker Thomas Angove received a patent for the first wine barrel.

Casks are now “part of our life style”, as the “Ask for Cask ” campaign from the wine industry tells us.

According to the report of the Foundation for Alcohol Research and Education, cask wine is the most popular among the younger and older age groups and those living in lower-income neighborhoods. Nearly one-third of cask wine consumers drink daily, as compared to 7.9% of bottle wine drinkers.

Wine casks are a convenient way to store cheap wine without having to worry that the bottle will be open for too long. The “goon bag,” however, is a more affordable way for youths and others to drink.

The results of a study on 18- to 21-year-old West Australian alcohol drinkers included comments like:

We can’t afford to buy anything else. The lowest you can go is to be a goon.

Many of the images of Australian culture include VB cans, Goons bags, and XXXX in their national cultural imagery.

Alcohol ads generally deny that they are targeting young people, despite the overwhelming evidence to the contrary. It’s difficult to believe that young women were not intended when a cask was produced as a handbag.

The marketing of cask wine often targets young women. Matt Biddulph/FlickrCC BY-SA

As with all products, prices vary. However, it is not unusual to find a cost of A$2 per liter. One of the largest alcohol retailers offers a discount on two or three casks of wine when purchased together.

Henry Review has described our alcohol tax system as “incoherent.” It discriminates heavily in favor of cheap wine. The Wine Equalisation Tax (WET) taxes wine based on its wholesale price, not alcohol content.

The less expensive the wine is, the lower the tax. Cask wine is taxed at a tiny amount per standard drink in comparison to other alcoholic beverages such as beer or spirits.

WET is a bizarre law that only serves the interests of a few in the alcohol industry. This anomaly is unnecessary at a time of mounting evidence that alcohol causes catastrophic harm – whether it’s the consequences of drunken driving or violent acts or hidden injuries, such as cancers and domestic violence.

Instead, the federal government should introduce a volumetric system of taxation based on alcohol content in a product.

major review in 2009 of 112 studies concluded that not only are “beverage prices and taxes related inversely with drinking”, but also that the “effects of these policies are significant compared to prevention programs and policies” and that “policies which raise the price of alcohol are effective to reduce drinking”.

The review revealed that:

Alcohol advertising and making alcohol less accessible and more expensive are both cost-effective ways to reduce harm.

According to FARE, a volumetric tax and the elimination of alcohol tax bias in favor of cheap cask wines and wine would raise A$3.4 billion within four years. This is a great gift for any government during these difficult economic times.

This is, of course, in addition to any savings that may be made from reduced alcohol-related harms. The cost is estimated to be upwards of A$15 Billion per year.

Other producers have good commercial reasons to support tax reform. Some states also have sound political reasons to support what amounts to a subsidy to their wine-growing industry. South Australia has long lobbied to keep the WET in place, primarily as a way of supporting the cheap and nasty wine industry there.

The big chains will continue to promote and sell the product as long as it is affordable, attractive, and available.

Joe Hockey, the Federal Treasurer, should not be dependent on white papers or delays to announce the measure. He must act immediately to reform Australia’s out-of-date and chaotic alcohol taxation system and to consign cheap wine to the past. He should allocate some of the extra revenue towards funding prevention and treatment programs.

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