Fifty years on, time to call it a day for cheap wine casks

In 1965 Sir Robert Menzies was Prime Minister of Australia, Charles Perkins led the Freedom Ride protesting against racial discrimination against Aboriginal people, and on April 20, a patent was issued to winemaker Thomas Angove’s company for the first wine cask.

Since then, as the wine industry’s “Ask for Cask” promotion campaign tells us, casks have been “part of our lifestyle”.

According to a 2012 report from the Foundation for Alcohol Research and Education (FARE), cask wine use is most popular among the youngest and oldest age groups and in less affluent neighbourhoods. Almost one-third (31.6%) of cask wine drinkers drink daily, compared with 7.9% of bottled wine drinkers.

For some people, wine casks simply provide a useful way of storing cheap wine without having to worry about the bottle being open too long. But the “goon bag” is also a cheap way for young people and others to get drunk.

A study of 18- to 21-year-old West Australian drinkers elicited comments such as:

Cheap alcohol is really important for younger people as we can’t afford anything else. Goon will be the lowest of lows you can go.

It’s part of our national stereotype, that Australians drink lots of alcohol at pubs, and many of our national cultural images include XXXX cans, Goon bags, VB, etc.

Alcohol advertisers generally deny targeting the young, despite so much evidence to the contrary. When a cask is produced in the form of a handbag, it’s hard to imagine that young women are not the intended market.

Cask wine is often marketed to young women.Matt Biddulph/Flickr, CC BY-SA

Prices vary, as with any such product, but around A$2 a litre is not uncommon. All too often one of the major alcohol retailers will be offering an even bigger discount when two or three wine casks are purchased together.

Our alcohol tax system – rightly described by the Henry Review as “incoherent” – discriminates massively in favour of cheap wine. Wine is taxed on its wholesale value, not its alcohol content, through the Wine Equalisation Tax (WET).

So, the cheaper the wine, the less it is taxed. The government collects tiny amounts per standard drink for cask wine, compared with other alcoholic products such as beer and spirits.

The WET is an anomaly that serves no interests except some in the liquor industry. At a time when there is so much evidence about the catastrophic damage caused by alcohol – from the obvious consequences of drink-driving or drunken violence, to the hidden harms that range from cancers to domestic violence, and longer-term harms to children’s developing brains – this anomaly should go.

The federal government should instead introduce a volumetric tax system based on a product’s alcohol content, while ensuring that this does not reduce the price of spirits.

A major 2009 review of 112 studies concluded unequivocally not only that “beverage alcohol prices and taxes are related inversely to drinking”, but that “effects are large compared to other prevention policies and programs” and “policies that raise prices of alcohol are an effective means to reduce drinking”.

A further review found that:

making alcohol more expensive and less available, and banning alcohol advertising, are highly cost-effective strategies to reduce harm.

FARE has estimated that ridding the alcohol tax system of its bias towards cheap and cask wine and implementing a well-planned volumetric tax could raise more than A$3.4 billion over four years – surely a gift horse for any government in harsh economic times.

That, of course, is in addition to any savings from reduced alcohol-related harms, the cost of which is estimated at upwards of A$15 billion a year.

There are sound commercial reasons for other producers to support tax reform, just as there are sound political reasons for some states to support what is effectively a subsidy for their wine-growing industries. South Australia in particular has a long history of lobbying to maintain the WET, as part of its support for the cheap and nasty component of the wine industry that flourishes there.

As long as the product is available, cheap and attractive, the big chains that dominate the market will continue to sell and promote it.

Federal Treasurer Joe Hockey should not have to rely on white papers, submissions and delays before announcing the measure in the next budget. He should act now to reform Australia’s outdated and chaotic alcohol tax system and consign dirt cheap wines to history. He should then allocate at least some of the additional revenue to funding for prevention and treatment programs.

That would be a doubly welcome way to celebrate the 50th anniversary of the cask.

Mike Daube is Director of the McCusker Centre for Action on Alcohol and Youth and co-chair of the National Alliance for Action on Alcohol.