WHISKY PROFITS

Dominion, Volume 12, Issue 235, 30 June 1919, Page 6

WHISKY PROFITS

MILLIONS READY FOR THE CHANCELLOR

DUTY PAID BY WATER

There is nothing more simple in Bud-get-making, says a correspondent (if the London ".Daily News" than estimating what the spirits duty will produce ,or how "the trade" can bear it. In the British bonded warehouses at present there is the ample supply of 111,500,000 proof gallons (one half alcohol and one half water). For the current year IS.000,000 proof gallons are to be released for consumption, and the revenue at the present duty of 30s. per gallon and at an increase of 33 1-3 and 50 per rent, may oe seen at a glance: - Revenue. .£ At 30s, per-,proof gallon 27,000,000 At iOs. per proof gallon 36,000,000 At 455. per proof gallon l 40,500,000 The question now is: Can the makers stand-this extra duty without charging I extra to the public? . The easiest way to lest this is to take a bottle of whisky as now solil to the public at a maximum allowable strength of 30 degrees-under proof. Practically the whole of the whisky now in bond and available for release was made before the war. Then whisky could be made at from Is. io 2s. Bd. per gallon, according •to material and method, and lid. per gallon , per year has been estimated as a fair chaige to add for interest on capital and charges for bonding. There ale six bottles to the gallon, and as water must be add d to reduce the strength, the duty paid at 30 degrees under proof works out at Is. 9d. per bottle before the war and 3s. (id.- per bottlfc at rlhci present rate._ Taking the original cost per bottle at sdj, adding Id. per vear for' (say) five years in u0n.1,; that'will make lOd. per bottle for cost and increment. Eliminating the duty as just mentioned, the following shows liow a diluted bottle of whisky is sold to the public at allowed prices:

Ex duty. B ' profit. Cost, etc J , 14 . Pre-war sale price - u J ™ Present, prices: Grocer •"> ■' ® sbu Public-house (bottle) 9j> JMO ■ Public-house (retail) 1' 10 An addition of some 50 per cent .to the present duty would still leave a. fcVtes profit rauging from 350 to 1820 pu i.ent. for makers and retailers! • ' •

Fortunes in Water. In justification cf the estimate of 10d. per-bottle, or ss. per gallon (diluted) tor cost and increment, it need only bo tioned that prime whisky made undei the identical conditions was sold by auction at Mincing Lane in March, 1916, at from 9s. to lis. per proof gallon, duty free, the price being considered high. Moreover, in the three .months ended March 31 last makers and dealers exported British-made spirits to the extent of 390,000 gallons at) Bs. 6d. per gallon, "free on board." That is only 7s. "d. per proof gallon, more than , the present public-house retail price per bottle or diluted whisky. * • Of course, tho-water must be taken into account in tlie assessment ot'dutj. The makers and blepders are actually making a charge for their troubto in "breaking" the whisky by adding water. They say nothing about tho. charge they make for the water out of which they have literally made fortunes m the past few years. ' , , By far 'the most valuable ingredient in whisky as retailed is the added water. It is hardly too much to eay that enough money is made out of the added.water sold to the public as would pay. the entire of the added duty at 33 1-3 per cent., or some .£9,000,000. ' - In the face of these facts and figure;, the distillers argue that British spin la cannot bear any more taxation unless a further addition is allowed to the extortionate prices already charged the public. They threaten a boycott, and appear to think that they can refuse to -supply goods from bonded warehouses now in charge of the Government. To such n preposterous threat there are two simple courses open to a Ghancet.loi' with courage; One is to take over the stocks of the bonded warehouses at a reasonable and readily assessed valuation. lly doing so he could sell .whisky to the publicans and the public at a lower rale than present prices, and at the same time make a handsome profit in addition to increased duty. The other course is to save the distillers and blenders the trouble'of shutting down the bonded warehouses themselves by the simple expedient of prohibiting the sqle of spirits altogether except as denatured for industrial purpose's. Parliament would not refuse sanction to either course in an extremity.