Tax on the poor man


In the late 80s and early 90s, the renowned Penfolds Bin 389 was regarded as the "poor man's Grange" because it was aged in barrels that used to house the Grange and was about 1/20th of the price.

These days it's shot up in price and, at more than $60 a pop, isn't really relevant to the poor at all.

I was reminded of all this when reading about proposed changes to taxes on alcohol under the Henry review of the Australian taxation system, which will be released on Sunday.

Wine is taxed very differently to other forms of alcohol, but under Ken Henry's proposed plan it is expected there will be just one tax rather than a myriad others.

It means wine, spirits, beer and other alcohol will be taxed the same rather than under 13 different tax rates as is currently used. And wine prices will be most affected because of the way wine is taxed.

But what does it mean for you the wine drinker?

Well, it depends if you were one of those poor men (or women) looking for a hint of that Grange or if you were one of the lucky ones able to purchase Australia's most iconic wine.

You see, under a single rate of excise at a rate proposed in the Henry review, any wine under $27 would go up in price, while anything over $27 would come down.


Essentially, the more expensive the wine, the cheaper it will be if the proposals are put in place, as expected.

It will be an interesting fallout, whatever happens.

Health groups have long lobbied about how easy it is to get your hands on cheap booze. For example, they say cask wine is equal in price to soft drink.

But the Australian Hotels Association is at odds with the health lobby. They don't want the new tax to hit low-income workers while the rich further deepen their pockets.

Under Henry's proposal of one volumetric tax, the current Grange recommended retail price of $620 would drop by $100, while a four-litre cask wine worth $15 would soar to around $35.

In essence, the poor man may be a little closer to attaining a Grange, just don't expect him to drink much (cheap) wine while he pursues his dream.

What do you think of the proposed changes? Comment below or here.

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Winestein Uncorked

2008 Rolling Shiraz, $18, 14%, 89pts
Extremely lovely and luscious for such a young wine, with flavours that literally roll around your palate. A very ripe and rich shiraz from the rolling hills of the Central Ranges in NSW.

2009 Rolling Sauvignon Blanc Semillon, $18, 12%, 87pts
Unlike many Semillon blends, when the grassiness can counteract the smoothness of the drop, this held hands with the Sauvignon Blanc grape like an old school friend. So light and subtle, with the hint of acid from zesty citrus, it sailed down the throat with frightening ease. Enjoy it with something like seafood risotto and watch as its subtle favours suddenly bloom in your mouth. A real little find.