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Excise Increase: Fortified Wine Sales Down 41%

Fortified Wine Sales Down 41%, 1 Year After Excise Increase

New Zealand Winegrowers has marked the anniversary of the May 2003 excise increase on fortified wine by announcing that sales of fortified wine have declined 41% in the past year.

Based on data from New Zealand Customs Service, New Zealand Winegrowers said fortified wine sales between 1 June 2003 and the end of March 2004 (the latest month for which data is available) were just 587,000 litres, down 41.1% on the 996,000 litres sold in the corresponding period in the previous year.

Commenting on the data Winegrowers CEO Philip Gregan said “The decline in sales in the past year has been dramatic and is a direct result of the excise increase of 6 May 2003. It is clear the increase has effectively destroyed the fortified wine market in New Zealand. Undoubtedly, this has been a disaster for many of those wineries who specialised in fortified wines.”

Mr Gregan said fortified winemakers were still did not understand why the excise had been increased. “The declared policy intention was to deter young people from drinking excessively. However, the principal consumers of fortified wines in New Zealand were the elderly, and it is them rather than young people who were primarily affected by the 2003 tax increase.”

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