Beer, cigarettes up

Press, 22 June 1979, Page 1

Beer, cigarettes up

The public-bar price of beer will increase by 13 per cent to 26c for a 250 ml glass and 52c for a 550 ml glass as a result of the 30 per cent sales tax imposed in the Budget, according to the Press Association.

A pack of cigarettes which cost 67c will now cost 78c and pipe tobacco which sold for $1.30 will cost $1.49. The Budget imposed a 15 per cent tax on cigarettes, tobacco, and tobacco products. The present sales tax of 20 per cent on alcoholic spirits has been increased to 40 per cent.

This means that a nip of New Zealand whisky in a public bar will go up 8 per cent to 41c while a nip of imported whisky will rise by 9.5 per cent to 46c.

A jug of beer will cost 15.6 per cent more at 99c and the price of a flagon of draught beer from a bottle store will increase by 15.6 per cent to $2.

A bottle of New Zealand whisky will now cost $9.21, an increase of 16.6 per cent, and a bottle of imported whisky will cost $12.08, a rise of 16.7 per cent.

The prices of other spirits are likely to increase by up to $1.50 a bottle. The new prices are not expected to come into effect until old stocks have been exhausted. The Minister of Customs (Mr Templeton) said that cigarettes, tobacco, and beer had previously been exempt from sales tax although they were subject to specific excise and tariff rates. The disadvantage with relying on specific rates alone was that they did not keep pace with increasing prices whereas ad

valorem rates helped to increase the duty or tax element in line with price increases. It had therefore been decided to add a sales tax while keeping excise and tariff rates at their present levels. The increases in sales tax on alcohol and tobacco were designed to reflect the increasing social cost which the consumption of these products imposed on the community and also the fact that the prices of alcohol and tobacco had risen more slowly than other consumer prices.