Let's Support The Excise Tax Rise

[nzbrewer]

Excise tax will disadvantage budget beer more that craft beer.

Here is the explanation from a recent email discussion I had with economist Eric Crampton

"Let's suppose excise taxes double. A bottle of mass market beer that currently sells for $1 including $0.40 in tax would ramp up to $1.40 (assuming full pass through for simplicity for now) while a bottle of craft beer that sells for $3 including $0.40 in tax and whatever in existing margin would ramp up to $3.40 plus excess margin: $3.54. I'm there assuming that the retailer charges an extra 35% on the wholesale price increase of $0.40. Excise tax on both beers is $0.80 but the craft beer is charged an extra total of $0.28 in margin: effectively, $1.08 ($0.54 of pre-hike, $0.54 post hike). Ok, I can buy that.

Now here's the part that I'm still less convinced about. Comparing the before-hike and after-hike prices, the mass market beer has increased in price by 40% while the craft beer has increased in price by 18%, even including all of the markups (and assuming zero excess markups on the mass market beer)."

Bottomline the cheapest beers are the most disadvantaged.

[Christian]

The way I see it - though craft beer is relatively cheaper, people who can only afford cheap aren't going to suddenly switch to craft beer because there is still a large price differential. I buy craft beer but will probably buy less if the price increases (or switch more of my purchasing to cheaper, middle-of-the-road beer).

Bottom line - NO EXCISE INCREASE!!!

You can take my pint glass from my cold, dead hands!!!

[Horace]

A tiered system might be a better way to go. X amount non- taxed, once more than that level had been produced the rest is taxed. This would help smaller producers get a foot hold or make a reasonable profit - which would then be taxed.

[Greig McGill]

How about no excise tax at all? Why the hell should the government get money from private production?

*grumble*

[Ally Mcg]

Surely we all wanna veto this tax rise on account of the fact we all singed the petition against penalising craft brewers with the same tax increase as non craft brew dudes?

As a hippy socialist (with short hair) i respect the right of the govt to tax the societal negatives (like alcohol abuse as a result of binge drinking) as long as they spend that money on the societal positives(people drinking beer in moderation).
Any how. Anything that means an increase in the price of craft brewed stuff is likely to turn the average punter off CB stuff.

Is your average punter likely to go to their local supermarket and buy a bottle of CB stuff cos the price increase seems proportionally less than that on the mega swill stuff? I doubt it. Petition the govt to offer a tax break to small breweries and wait for the mainstream revolt.

The only way to improve the position of Cb'd beer is to oppose an