Policy options · Alcohol tax standardisation

Same drink, same tax: five ways to fix Australia's alcohol tax

Australia taxes alcohol at eight different rates. A standard drink from a cask pays about in tax; the same alcohol in a bottle of vodka pays . The 2010 Henry Tax Review said every drink should pay the same rate per litre of alcohol. This report models what that, and four alternatives, would do to shelf prices, drinking and revenue.

Clax10 · 28 Oct 2026Rates as at 3 August 2026Static model, 11 representative productsPrices are indicative shelf prices
The problem

Tax per standard drink today

gap between the most and least taxed standard drink
8different rates: five for beer by strength and container, two for spirits and brandy, and the WET on wine
29%WET on wine's wholesale value, so the cheapest wine pays least tax per drink

Excise or WET in each product's shelf price, per standard drink

One standard drink = 10 g of alcohol
The options

Pick an option to see what changes

Tax per standard drink

This optionToday

Change in shelf price

CheaperDearer
Henry's single rate

Choose the rate

Henry left the level of the single rate open: start revenue-neutral, then move toward the social cost of alcohol. Drag the rate to see the revenue and drinking trade-off. Today's packaged beer rate is $65.03 and the spirits rate is $110.15 per litre of alcohol.

$20$45$70$95$120

Revenue change, $m a year

Change in pure alcohol consumed

Evidence

What happened when prices were aligned to alcohol content

Northern Territory, 2018–2024−50.6%

Cask wine fell by half under a $1.30 floor

The NT set a minimum price of $1.30 per standard drink in October 2018. Cask wine consumption per person fell 50.6% in the first year. The three-year evaluation found a 25.8% fall in alcohol-related assaults outside the home, no change in domestic assaults, partial switching to spirits, and no harm to tourism or the liquor trade. After the floor was repealed in 2024, products under $1.30 returned to Darwin shelves within a month.

Coomber et al., NT Government final report (2022); Taylor et al., Drug and Alcohol Review (2023); Miller et al., Addiction (2026)
Australia, 2008−30%

The alcopops tax put RTDs on the spirits rate

In April 2008 RTDs moved up to the full spirits rate, the one time Australia has aligned two beverages by alcohol content. RTD sales fell more than 30% in the first full year and total pure alcohol sold fell 1.5%. Extra spirits and beer replaced only about half of the lost RTD drinks.

Chikritzhs et al., MJA (2009); Skov et al., MJA (2011)
United Kingdom, 20236 bands

The UK moved every drink onto strength bands

From August 2023 the UK taxes all drinks by alcohol content in strength bands, with a low rate under 3.5% ABV, a 9.2% draught relief for pubs and a single small producer relief across beer, cider, wine and spirits. It shows a large market can make the change in one step. Option C uses the UK's rate ratios.

HMRC alcohol duty reforms, 1 August 2023
Scotland, 2018–2020−13.4%

A floor price cut alcohol deaths

Scotland's 50p-per-unit minimum price was followed by a 13.4% fall in deaths wholly caused by alcohol over 32 months, compared with England, or about 156 lives. The largest falls were in men and in poorer areas, where the cheapest, strongest products are most often bought.

Wyper et al., The Lancet (2023)
Australian modelling$1.3bn

Replacing the WET alone pays for itself

Modelling of 2010 sales found that a volumetric tax on wine would raise $1.3 billion a year, cut alcohol use 1.3%, save $820 million in health costs and avert 59,000 disability-adjusted life years. A separate study put the one-off cost of switching to a volumetric system at $18 million.

Doran et al., MJA (2013); Byrnes et al., MJA (2010)
Method

How the numbers are made

  1. Each product stands for a slice of the 216 million litres of pure alcohol Australians bought in 2023–24 (AIHW), split by beverage, strength and draught or packaged.
  2. Today's tax uses ATO excise rates from 3 August 2026. WET is backed out of the shelf price assuming a 35% retail margin and 10% GST.
  3. Each option's tax change is passed through to the shelf price in full, plus GST. Under every reform the 1.15% ABV tax-free threshold applies to all drinks, as Henry proposed.
  4. Consumption responds to each drink's own price through elasticities from the Wagenaar et al. (2009) meta-analysis: beer and cider −0.46, wine −0.69, spirits and RTDs −0.80. Drinkers also switch: when a drink gets dearer, 30% of the alcohol given up moves to similar drinks (beer and cider; wine; spirits and RTDs) and 10% to other drinks. The range under each option's alcohol figure re-solves the model with 20% and 53% switching. 53% matches the share of lost RTD drinks replaced by spirits and beer after the 2008 alcopops tax. Very large price changes, such as the cask doubling, are less precise.
  5. Revenue-neutral options are solved after the consumption response. Modelled revenue today is , about 10% above the official take because producer rebates and discounting are not netted off. Changes are measured against that base.
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