RTD Tax Hike a Boon for Brewers: Analyst

06 March, 2009 by

By Ian Neubauer

Beer is likely to win a larger share of the Australian alcohol market if the RTD tax hike bill is passed in the Senate this month, according to an analyst for Goldman Sachs JBWere.

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Analyst Ian Abbot said the slight increase in the volume of beer sold since the RTD tax hike was introduced in April last year would escalate if the Senate approved the bill, The Australian Financial Review reported.

Volume sales for RTDs nosedived 26 per cent in the first three months following the tax hike. Other categories of alcohol picked up most of the slack, with spirit sales increasing 11 per cent and beer sales climbing 1.5 per cent, according to Nielsen data.

Other factors contributing to the increasing popularity of beer include hot weather, the proliferation of low-carb beers and malternatives in the marketplace, as well as the economic slowdown, which propels the sale of cheaper forms of alcohol.

Abbot also offered a cautionary note by questioning how long beer can sustain volume growth. He added that the trend will likely be reversed should the Senate reject the RTD tax hike bill.
 
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