Alcohol prices to rise with tax hikes tomorrow

Photo / Ian Waldie

Adding to the gloom of winter and a recession, the price of booze is likely to rise when the Government increases the excise tax on alcohol by 2.8 per cent tomorrow.

Some retailers tried to resist passing on price rises from the main breweries in March but would be forced to increase prices now, Hospitality Association of New Zealand chief executive Bruce Robertson said.

"My understanding is that most manufacturers are going up similar amounts or more - I certainly know that Lion (Nathan) and DB (Breweries) are increasing their prices by at least 3 per cent, and we're certainly expecting that retailers are going to have no choice but to pass that on to consumers," Mr Robertson told NZPA.

Different rates of tax are paid on different levels of alcohol, but the 2.8 per cent increase will apply to all tax rates.

Prices were expected to rise over the next month, with some retailers likely to apply it immediately and others using up stock before passing on the increase.

Tax increases could contribute to a further decline in sales, and job losses across the hospitality, entertainment and beverage industries, the Distilled Spirits Association said.

The Hospitality Association had written to Minister of Finance Bill English asking that the annual adjustment be deferred.

The tax, which is adjusted to reflect the rate of inflation, rose by around 3.5 per cent last year.

- NZPA