DISTILLATION.

Otago Witness, Issue 876, 12 September 1868, Page 1

DISTILLATION.

For some time past, the desire has been frequently expressed that the distillation of spirits in the Colony should be encouraged. SinCe the produce of barley in this Province became considerable, the ■abject has had considerable attention here, and it was, if we do not mistake, at the suggestion of our present Superintendent that an Act was introduced into the Assembly in 1865, to provide for the licensing of distilleries, which up to that time were entirely prohibited. It waa renewed with emendations in each of the two following sessions. No application for a license under these Acts has, we j believe, been made, and none of the regulations necessary for their working have been gazetted. A more complete Bill is now before the Assembly, in which all the necessary regulations are embodied. Those who have a practical acquaintance with the husiness of distillation as carried on at home, will understand the character of the Bill, on being informed that it is I as nearly in accordance with the existing state of the law in the Mother Country, as the circumstances of the Colony allow. To make those who have no such acquired information on the subject understand the provisions of the Bill by any explanation which would fit the limits of a newspaper article, would hardly be possible, and we shall not attempt it. Our object to-day is rather to explain what probability there may be that this modification of the existing law will really promote the establishment of an industry which our agriculturists are so anxious to see flourish amongst us. We wish also to cnll the attention of our brewers and spirit merchants to certain clauses of the Bill which directly affect them.

The present {rate of duty on imported spirits is acknowledged on all hands fo be too high. Whenever sufficient facilities exist for it, smuggling will be carried on when so high a premium is held out to it. Until the financial policy of the Government had been definitely stated, it was generally believed that a reduction of the spirit duties at an early date was, if not certain, highly probable. Ministers have now declared that they cannot see their way to any mitigation of the tariff. This being so, it could not be expected that they would bring in such a Distillation Act as is needed to enable the manufacture of spirits to be commenced with any hope of present success. Such a Bill should have only one clause, repealingthe Act of 1841, which, prohibits all distillation. If the introduction of this new industry must bring upon the country an Excise establishment, we feel quite sure that we are, in

our present stage of progress, better without it. The Excise duty to be placed upon spirits of colonial manufacture is fixed by 1 the Government at eight shillings, the rate named in the former Ordinances. After a sharp discussion and a division, in which the Government had only a- small majority, Mr Richmond announced that he consented to a compromise by which the duty on spirits distilled " from grain grown in the colony should be only six shillings,- the higher rate being retained for spirits produced from- sugar. -The premium, therefore, which is to be offered to the colonist to induce him to embark his capital in a distillery- is a differential duty of six shillings per gallon. It cannot be doubted that this is sufficient to encourage the manufacture if it is really available — on the other hand, it is extremely doubtful whether any less advantage will suffice for some years to come. But an Excise duty cannot be collected as a Customs duty is, at little or no cost to the individual taxed. The restrictions and troublesome regulations under which the manufacture of spirits must necessarily be carried on in order that the revenue may be protected will, we feel sure, be found quite sufficient to outweigh any advantage which the extra duty on the imported article may appear to give to the colonial producer. Those who have no practical knowledge of the matter can hardly form a just estimate of the addition both to original outlay and to the working expenses of a Distillery, which compliance with the Distillation Act will involve. Those who have such an acquaintance with the business will, we feel sure, recognise at once the impossibility of making it pay in a young country where the market is limited, labor is very dear, and time, i.e., the interest of money, also a costly thing. Thus much foF the manufacturer's side of the question — there is another worthy of consideration. Of all methods of raising revenue, Excise duties are the very worst. Under no form is taxation 30 expensively collected as under this ; under none is the process so inquisitorial. These, however, are not its worst features. In no other way is the taxpayer so entirely placed at the mercy of the revenue officer, and — a still more important consideration — in no other way is the collector of the tax so exposed to temptation. In a densely peopled country, and with the stringent rules and splendid organisation which exists at home, fraud on the revenue is pretty sure in the long run to be detected. Here, under the law now proposed, if the inspector and the master distiller are of one mind, detection of fraud would be almost impossible if the most moderate precaution were taken to avoid suspicion. Much as we desire to see new industries take root amongst us, more especially if by their aid the produce of our own soil finds an extended market, we can neither hope nor desire that the Distillation Act will pave the way for the establishment of spirit manufactories in New Zealand.

The evil of an Excise establishment will not be confined to its effects upon the industry, to hang round the neok of which it is specially framed. Lest fraud should go on in distilleries, brewers must be looked after, and an eye kept on spirit merchants. Let the system be once introduced, and we shall find ourselves in the end involved in the same absurd network of restriction as exists in Great Britain, where the quantity of spirits a publican may have in stock at once, the arrangement of his cellar, even the amount of water he must put into his spirit casks, are all mapped out for him. The Distillation Act says that no brewery shall be within five hundred yards of a distillery. As matters stand, this restriction would interfere for the present with the distiller only who would have to get out of the way of existing breweries. It may be doubted, however, whether any thing could be more probable in the absence of all such restrictions than that distilleries, if set on foot at all, would be started in conjunction with breweries. However this may be, in order to permit the distiller to come upon the scene it is found necessary to make the brewer register himself, and hand in to the Collector of Customs " a particular description" of his premises, in return for which and for a fee of £10 per annum he shall have a license to carry on his business. But not as heretofore, without let or hindrance. For the future his premises are to be subjected to inspection by Revenue Officers : if he carries on the business of a dealer in spirits it must not be in the neighbourhood of hia brewery ; he shall be liable to a penalty of forty shillings a gallon for

all spirits in excess^"^*^^ gallons which may be found upon his premises, and so forth. The spirit merchant has still harder lines dealt out to him. He arid his premises must also be registered, and Ms license is to cost him £25 per annum. And all this in order that New Zealandgrown barley may have a chance of beingmade into whisky in the colony. If no better way can be devised of encouraging native industry than this, we had surely better be without it. We believe the whole thing tc be uncalled for — unnecessary — and certain for many years to come to do far more harm than good, if not to cause a positive' loss to the community. How far Ministers themselves believe in the success of their measure may be " judged from what Mr Richmond himself said in reply to objections when the Bill was first introduced. " The only way in which distillation couldbe carried onand made remunerative would be on a small scale, and that would not answer for the revenue — it would cost too much for supervision. He thought that nothing short of free manufacture would establish the industry in New Zealand." We Bhare these convictions with him, but we have also another which does not seem to have forced* itself upon ' his mind. The Government which, holding these views, could prepare for the consideration of the House of Representatives the forty-six folio pages of the Distillation Act 1868, is trifling with the business of the country.