Rural hotels ‘at risk’

Press, 11 July 1988, Page 2

Rural hotels ‘at risk’

PA Wellington The future of many rural hotels will be at risk if proposed changes to alcohol taxes are accepted by the Government, according to the Hotel Association.

Among recommendations an advisory committee put to the Minister of Customs, Mr de Cleene, were cutting excise on ordinary bottled beer 5c a litre and putting the rate on draft beer up a similar amount. It said such a change would remove a longstanding anomaly in beer pricing. “Given the state of our industry, particularly fn rural areas, we’d be appalled if that happened,” said the Hotel Association’s chief executive, Mr

Tom Sheehy. “A great many hotels are finding it very difficult to operate. Putting prices up would have serious consequences.” Reaction from other sections of the alcohol industry to the committee’s proposals ranged from relief among wine makers to anger from the spirits sector. The committee suggested reducing excise on wine from $l2 a litre of alcohol to $lO and standardising beer rates at $14.50 a litre and spirits

at $3O. The effect on wine would be small reductions in the price of bottles but retail savings of around $1 or $2 on a three-litre cask, depending on its alcoholic strength. The most popular spirits, whisky and gin, would rise about 70c a bottle while brandy and rum would drop about $l. Last year the Government raised $433 million from tax on beer, wine and spirits. Under the regime proposed, the take would fall to $419 million.