COST OF BEER

Evening Star, Issue 25618, 19 October 1945, Page 7

COST OF BEER

THE TRADE’S CASE HIGHER TAX ON WEAKER ARTICLE (P.A.) WELLINGTON,. Oct. 18. Suggestions by counsel for the New Zealand Alliance that as a result of the reduction in the alcoholic content of beer the brewers were making a profit out of the sale of water to the public were answered by Mr P. B. Cooke, K.C., in his final .'address on behalf of the National Council of the Licensed Trade before the Royal Commission on Licensing to-day. He characterised the suggestions as unfair and misleading. It had been suggested, Mr Cooke said, that the brewers were selling 1,900,000 gallons of water for £809,000, and out of that were able to pay their extra war taxes and make a'profit of £39 000. Tne suggestion, he added, involved three obvious fallacies. It assumed, incorrectly, that what was being sold and taxed was water, whereas in fact it was beer, though weaker beer. It completely disregarded the fact that labour was a big item in the production cost of beer, and was no less in producing weaker beer than in producing stronger beer. It disregarded the fact that a reduction in the cost of materials was taken into account against the brewers by the Price Tribunal. Counsel for the alliance, Mr Cooke added, had not mentioned that the price of beer had been reduced by 4s a hogshead on account of the reduced cost of materials. The Legislature had simply done what it had done before—imposed a higher tax on weaker beer. Mr Cooke went on to refer to the 10 per cent, tax-free allowance granted to the brewers on account of wastage which had been criticised by the alliance as too generous. The Customs figures showed that the average "figure for wastage throughout the Dominion was 7.29 per cent., said Mr Cooke, and, having regard to all the variable factors, it was not, he submitted, unreasonable to treat 10 per cent, as an appropriate allowance. Customs witnesses had said that, were it not for two exceptions, the arbitrary allowance of 10 per cent, would be as equitable as any that could be devised, Mr Cooke continued. There had been evidence that of 40 breweries the wastage in 23 was 10 per cent, or less, and in 17 more than 10 per cent. At 21 of the breweries the wastage was within 2 per cent., plus or minus, of the 10 per cent, allowance, and if the bottling losses at the Lion and Captain Cook were included the figure would be 23. Mr H. W. Milner, of the alliance, had suggested that beer on which duty had not been paid was sold to the public, Mr Cooke said. He was, however, overlooking the fact that there were three clasess of wastage not subject to the statutory allowance. There were in the first place the losses of beer spoilt in circumstances which did not give rise to a claim for a refund of the duty.. The alliance had not told the commission that the NewZealand provisions about spoilt beer were much harder on the brewer than those in England. The other two types of wastagelosses by outside bottlers and losses in hotels—though they were not borne by the brewer, did prevent beer from being sold to the public. . In all the circumstances it was submitted, Mr Cooke said, that the present flat allowance of 10 per cent, should be retained. Mr Cooke discussed in detail the methods of beer manufacture and the assessment of duty, strongly opposing the suggestion that the duty should be assessed at the point of sale rather than on the gravity of worts. The trade, he said, asked for the repeal of the special war taxes.