Liquor industry asks let's spike this tax on spirits

An hour snatched with Finance Minister Michael Cullen during his brief visit to Auckland yesterday did not win the support the liquor industry wants for a better deal on spirits.

The industry is asking for an end to an excise tax on spirits that is linked automatically to movements in the consumer price index.

It also seeks for spirits the access to supermarket shelves enjoyed by beer and wine.

But Dr Cullen seemed in no hurry to ease the industry's concerns, saying the issues would be considered at a later date.

The minister was escorted through the Contract Bottling Company in East Tamaki, a Lion Nathan subsidiary that processes the bulk of imported spirit product for sale in New Zealand.

He then heard some fairly specific complaints about what the industry calls discrimination.

Distilled Spirits Association head Thomas Chin told Dr Cullen that in several overseas markets, excise on spirits has not grown with inflation every year, in recognition of "the burden such a tax can put on business."

In Canada and the United States, the tax rate has not been adjusted since 1991, while

in New Zealand, excise tax on spirits had been frozen between 1989-1992.

But since then a big gap had once more opened between the liquor categories.

Mr Chin said all key indicators pointed to strong economic growth and asked Dr Cullen whether he could consider relinquishing any of the $100 million in tax spirit drinkers paid each year.

Dr Cullen said he could make no promises.

"But I don't have a closed mind to it at all, and I welcome suggestions for the long term on the future of excise duty."

He said he was a "cautious liberal" in alcohol matters.