Keen imbibers hit by ‘the 15%'

Press, Volume CXV, Issue 33925, 19 August 1975, Page 28

Keen imbibers hit by ‘the 15%'

(By

ROBIN SMITH)

It cannot have taken long for most people to work out the most devastating blow dealt by the demon devaluation. It’s all very well saying that we are fast approaching the era of the $lO,OOO plastic mini. But really, with a bit jf luck, the old jalopy ought to make it through another 20,000 trouble-plagued miles, and in any case, if we wait long enough, cars will be obsolete anyway. No, what, most people would have come to realise on Sunday was that the price of new stocks of imported wine and spirits will shoot up.

The result will be that we will all end up swilling ale.

and quailing our local vino, wrecking our carefully cultivated image of the connoissieur. and condemning ourselves for eternity to the realms of drunken tosspottery. It will not do. Whether the prices will go up 15 per cent or more, or less, is something about which even the most knowledgeable claim ignorance. The intricacies of C.D.V. (current domestic value), C.I.F. (cost, insurance and freight), duty rates, mark-ups and sales tax are perplexing to even the best informed. Costs paid out in overseas funds, will automatically go up by 15 per cent. So the cost of a bottle of French wine from some Bordeaux

shippers, -or C.D.V. in “customese,” goes up. A Bordeaux price before devaluation could have been, say, $1.45, and with duty, freight and insurance paid, the bottle could cost the wholesaler about $4 35.

He would have put on his mark-up of, say, 15 per cent, bringing the price to $5. The customer then paid another 20 per cent of this which brought the final wholesale price up to $6. Retail price could be another 20 per cent on top of that again. Since devaluation, appropriate increases all the way along might bring the price of the same bottle up to nearly $7, a 15 per cent increase, and close to the current retail price. Duty costs are minimal.

Duty on the same bottle of wine would have been $3.42 for a case of a dozen. Duty at the new rates would be $3.68. which is an increase of about 2c a bottle only. Duty on spirits does not go up because it is calculated on the alcoholic content of the liquor, and has nothing to do with its value, although this may be related. Of course, the' other effect of devaluation is that because the importer has to pay more for each imported bottle, he uses up his quota of overseas funds more quickly. Import licences are allocated on a monetary basis, so the importer uses this up more quickly, and: gets less. This answers all those who have struggled tivs far

through these computations, and figured that the Government won because they received more duty. Not so. They get more duty but fewer goods come in, and they are exactly the same as before. So there it is. Nothing left to do now except build a cellar, and fill it quickly, preferably with the most expensive scotch and chateau bottled vintage you can find.

There is an alternative — rendered most eloquently by an old time toper — overheard in a pub on Monday: “A bloke would be better off with pot.”