Home' National Liquor News : NLN JULY 2016 Contents 12 | JULY 2016 NATIONAL LIQUOR NEWS
RETAIL LIQUOR INDUSTRY SLAMS
ACT GOVERNMENT'S "CASH GRAB"
The retail liquor industry has blasted the ACT Government, saying a
further 25 per cent increase to already high licence fees is a "blatant
cash grab" and "unacceptable".
This is the formal response to proposed huge hikes from the
Australian Liquor Stores Association (ALSA) in its submission to the
Government's 'Building on Liquor Reform: White Paper'.
To put it into perspective, the ACT already has the highest licence
fees for retail liquor outlets of any Australian state or territory. In
2010, the standard licence fee for a retail liquor outlet in the ACT was
$3055. If the current ACT Government proposal proceeds, this fee will
rise to as much as $24,498, which is an increase of over 800 per cent
in six years.
Adrien Murphy, owner of Jim Murphy Airport Cellars in the ACT, said
the increase is "madness" and "doesn't make any sense".
Murphy, who currently pays $20,000 annually in licencing fees,
stands to have that increased to $25,000 if the proposed increase
passes. Meanwhile, stores in neighbouring NSW can obtain a licence
The Government's reasoning behind the proposed hike is that it's not
a tax, but a 'pre-loading payment'. Meanwhile, that same Government
has said that small bars with less than 80 patrons that close by midnight
can have their licence fee cut by 75 per cent.
According to the ALSA submission, if the increase goes ahead,
there will be significant negative consequences for small businesses,
including reduced customer service, and the vibrancy of Canberra as a
destination for domestic and international tourists.
Murphy agreed, saying: "The money has got to come from
somewhere. The thing is that we can't afford to bump up our prices,
we would become uncompetitive which would mean people wouldn't
continue to shop with us, the only other thing you could do is get rid
He went on to say: "It's just going to make it harder for ACT
businesses to compete, especially when online is growing at such a
large rate. Whereas people who can have a NSW or Victorian licence
don't pay anywhere near our fees but can still send alcohol into the ACT
area without having to pay or subsidise any of their licence fees. What
they're saying is that I've got to pay for the person who is drinking at
home and then goes out into town, but I can be an ACT resident and
buy from any online retailer outside of the ACT and do exactly the same
thing but they don't have to wear any of the price."
RESULTS COME AS
The Brown-Forman Corporation reported on its year to 30 April saying
that it expects continued underlying growth into 2017. The news comes
as the managing director of Brown-Forman Australia announced he is
stepping down from the company.
"I'm stepping down from Brown-Forman, effective the 31 October and
I'll remain until that time," McShane said. "It was the finish of the fiscal
year and it was time to explore new opportunities."
McShane confirmed that it's a "very amicable parting" and says
that the company has had a good year, despite Australia being a tough
market right now.
"There aren't many companies that are doing well in this market and we
have had a successful year," he says. "Not many people have the opportunity
to pick their time and to [leave on a high]. So that's very good."
McShane says that he has not thought about where his next move will
take him, and that he will be staying on through the end of October to
"help assist with the transition". He will not be stepping down from his
various other positions, including those at the Distilled Spirits Industry
Council of Australia (DSICA) and DrinkWise.
Brown-Forman reported net sales had decreased two per cent to $4,011
million as foreign exchange negatively impacted net sales growth by six
points. While operating income grew 49 per cent to $1,533 million.
Paul Varga, the company's chief executive officer says that the growth
was driven by the increasing global interest in American whiskey.
"Fiscal 2016 was another successful year at Brown-Forman. We
delivered solid underlying growth in sales and operating income, led by
the Jack Daniel's family of brands. We also made important changes to
our portfolio of brands that we believe position us well for the long-
term," he says.
"Against a favourable backdrop of global interest in American
whiskey, we invested capital to expand our capacity and we returned
approximately $1.4 billion to our shareholders during the year. We
believe that our strong free cash flow and capital efficiency positions us to
deliver top-tier returns for our shareholders."
Australia came in third on the company's list of top ten countries
during the reporting period with a 12 per cent growth in reported net
sales and a two per cent growth in underlying net sales.
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