Under the tax increase, the level of excise charged on RTDs has been lifted from $39.36 per litre of alcohol content to $66.67.
Investors in Pacific Equity Partners funds which bought Independent Liquor in New Zealand last year won’t be too happy either. Independent is the largest producer of RTDs in Australasia. PEP paid well over $1.1 billion.
PEP’s website said about Independent:
“Independent Liquor (IL) is a leading manufacturer and distributor of alcoholic beverages, with a particular focus in the ready-to-drink (RTD) category, the fastest growing segment of the Australasian alcoholic beverages industry. Approximately 60% of IL sales are in Australia and 40% in NZ. Across the two countries, white and dark spirit RTDs represent 65% of sales.
“In NZ, IL has 3 of the top 6 dark RTD brands and 4 of the top 6 white RTD brands. Its main competitors in RTDs are Lion Nathan and Maxxiuum (distributor of Jim Beam). In Australia, IL has the close No.2 dark RTD brand and No.1 white RTD brand. Its main competitors are Diageo and Maxxiuum.