Connect with us

Health & Beuaty

‘Imitation’ spirit and soft drink sold for $9.99 slammed by health officials

Email 'Imitation rum and vodka' soft drink deal selling for less than $10 slammed by health officials ABC Newcastle By Giselle Wakatama

Posted May 16, 2019 06:11:55

They look like rum and vodka but are taxed as wine. Photo: These cheap drinks of up to 22 per cent alcohol look like spirits, but they are taxed as wine. (ABC Newcastle: Anthony Scully) Related Story: New wine industry tax arrangements included in federal budget Related Story: Academic says alcopops tax curbing binge drinking Related Story: Senate inquiry hears case for alcohol tax overhaul Map: Newcastle 2300

Health officials and the distilled spirits industry have slammed what they call an imitation vodka and rum deal, with soft drink, as akin to a deconstructed alcopop.

Key points:

  • Health researchers and the ABC obtained the 20-22pc alcohol, classed as wine, and soft drink deal at several NSW outlets for under $10
  • Researchers and the peak distilled spirits body say the products are taking advantage of wine taxation which is lower than spirits and beer
  • The ATO said it could act if the producers are not acting in accordance with tax obligations

The drinks avoid the high taxes linked to spirits as they are classed as wine.

The ABC has been investigating the deal involving a clear liquid, which comes in a wine bottle labelled Verochka, written in a Russian or Polish style.

Verochka is a Russian girl's name and means 'true', but health experts and those in the spirits industry have questioned the truthfulness of the product and its labelling.

It is 22 per cent alcohol, contains 13 standard drinks, and is offered in a deal where the purchaser can also get a bottle of soft drink for free.

The label contains the words "triple filtered, premium blend" in font similar to some popular vodka brands.

Doctors have also raised concerns about a brown liquid in a wine bottle labelled Sailor Jacks, with the label containing the wording "Caribbean premium spiced gold' in a style similar to popular rum brands.

It is 20 per cent alcohol and contains 12 standard drinks.

ABC reporters purchased a bottle of each at a bottle shop in New South Wales and were told the soft drink and liquor promotion was a supplier-driven initiative.

In a double deal, a consumer can buy two bottles of the high alcohol, wine based drink for $18 — along with the free soft drinks.

That equates to 26 standard drinks for less than $20.

Academic says look-alike spirits could make people sick

The deals have been slammed by Newcastle University academic Kypros Kypri, one of the architects of hotel lockouts and earlier closing times rolled out in Newcastle a decade ago, followed by Sydney.

A bottle of clear alcoholic liquid and a bottle of pink soft drink Photo: Dr Kypri said Verochka with a soft drink, sold as a package, "is clearly orientated towards a sort of cheap alcopop". (ABC Newcastle: Anthony Scully)

"The promotion that I have seen was of bottles of a clear sprit that looks like vodka and has a name, and the bottle, deliberately there to look like a vodka bottle and the name is Verochka," Dr Kypri said.

"It is being sold for $9.99 and you get a bottle of soft drink presented right next to it. That is clearly orientated towards a sort of cheap alcopop."

"There are 13 standards drinks in that bottle [Verochka], and that is certainly enough to make someone ill in a session."

Both drinks are produced and supplied by the company Kymbari beverages based in Victoria, linked to the Barrand Family Trust.

The ABC searched trademark records and other company data and was unable to find contact details for anyone linked to the trust.

Addresses listed on trademark applications were also searched, with at least two appearing to be abandoned or run-down factories.

The company's products are lawful and the ABC is not suggesting otherwise.

Cheap grog 'deconstructed alcopops'

Spirits and beer are taxed on their alcohol percentage.

Wine is taxed on its wholesale price, meaning consumers can pay far less tax — therefore a far lower price — for a wine with high quantities of alcohol.

A bottle of soft drink and a bottle of brown liquid Photo: Dr Kypri said the products were designed to "exploit the tax loophole and sell the alcohol so cheaply". (ABC Newcastle: Anthony Scully)

The CEO of the Foundation for Alcohol Research and Education, Michael Thorn, said offering the "look-alike" spirits so cheaply in a soft drink package deal is fraught with danger.

"It is definitely a deconstructed alcopop, there is no question about that," Mr Thorn said.

"This is why it is a highly problematic product, and why since 2014 we have been asking the Government to fix the anomalies in the alcohol tax laws that allows products to be sold so cheaply."

"The 2009 Australian tax review by Ken Henry described the tax system as incoherent, and it is something that public health organisations and the brewers all agree with," Dr Kypri added.

"The products are designed very much in mind to be able to exploit the tax loophole and sell the alcohol so cheaply."

Spirits industry livid

Spirits and Cocktails Australia is outraged about discrepancies in the tax system.

CEO Alec Wagstaff says the look-alike wine-based spirits have exploited a loophole for too long.

"It is crazy, particularly if they are being passed off as substitutes," Mr Wagstaff said.

Shelves of alcohol in a bottle shop Photo: Spirits are charged excise by alcohol content, while wine is taxed based on its wholesale price. (ABC News: Mitchell Woolnough)

"I think people should get what they are buying and shouldn't be misled or misrepresented by labels."

The Australian Tax Office (ATO) has issued a statement in response to the package deals.

More stories from ABC Newcastle?

Subscribe to The Weekly newsletter

Local news in your inbox

"The classification of a product to either the WET or excise system is based on the ingredients and the method of manufacture," the ATO said.

"The ATO cannot comment on the tax affairs of any individual or entity due to our obligations of confidentiality under the law.

"The ATO will investigate when it has information, or assesses, that individuals or entities may not be acting in accordance with their tax obligations."

Topics: food-and-beverage, alcohol, drug-use, health, trade, agribusiness, budget, federal-government, newcastle-2300, australia

Contact Giselle Wakatama

More stories from New South Wales

Continue Reading




Subscribe

Trending