The ATO recently advised they have revised the draft determination of attributes of beer. This is in relation to beer v seltzers and other brewed products that do not fit the conventional definition of beer.

It is important to our category because there have been instances of fruity beers and similar products that, in the eyes of the consumer, do not appear different to our spirit based RTDs, but are taxed at the beer rate and therefore considerably less expensive, putting our products at a relative disadvantage.

The Australian Distillers have written on several occasions to the ATO re hard seltzers and SCA previously commissioned research via the National Measurement Institute to demonstrate that some seltzer products/ fruity beers were falling foul of the ATO’s existing definition of beer.

We advocated for new guidance from the ATO to cover this emerging category so that products that appeared the same to consumers were taxed at the same rate (i.e. a seltzer is a seltzer to a consumer, irrespective of whether it is produced off a beer or spirit base, so it should be taxed at the same rate).

The ATO has been consulting on new guidance/ beer definitions over the past three years and circulated a final definition for consultation a couple of months ago. We opted not to respond at the time, as we felt our position was well known by the ATO and we thought they had landed on a position that is broadly consistent with our views.

We are also be concerned about a range of new RTDs made off shochu, soju and sake-bases and differing taxation rates for each.

The Australian Distillers board recently agreed to respond to the ATO draft publication in the following terms: