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  • Example 2 – draft ruling on whether a beverage will meet the definition of ‘beer’ for excise purposes

    Subject

    Flavoured beverage

    Question

    Will the product meet the definition of ‘beer’ as defined in The Schedule to the Excise Tariff Act 1921?

    Answer

    Yes.

    Relevant facts and circumstances

    The product to be manufactured is a flavoured beverage.

    The production methodology is as follows:

    • An aqueous extract is produced utilising the traditional brew house processes of mashing, lautering and cooling.
    • The aqueous extract is made up of wheat malt (85%) and sugar (15%).
    • Hops are added at the boiling stage.
    • The wort is cooled to 20oC and yeast strain is added.
    • The brew is transferred to a fermenter for fermentation to occur.
    • After maturation the brew is filtered and sugar and flavours are added.
    • The beverage is carbonated.
    • Water is added to the mash.

    Hops is added during the production process. The addition of the hops gives the product an International Bitterness Units (IBU’s) measurement of 5.0.

    After the fermentation phase, the quantity of sugar in the beverage is measured to ensure that there is no residual sugar after fermentation.

    No artificial sweeteners are added to the beverage.

    The following are added to the beverage during the production process:

    • 2g of sugar (sucrose) per litre
    • 0.5ml per litre of sodium benzoate (25%) in water (if unpasteurised). This is not added if the beverage is to be pasteurised
    • 2.4ml per litre of citric acid (50%) w/w in water
    • 4ml per litre of fruit flavour
    • does not contain any sugar
    • does not contain any alcohol.

    No spirit distilled from beer is added to the beverage at any time in the production process.

    The alcohol content of the final beverage is 4.5%.

    Relevant legislative provisions

    Excise Tariff Act 1921 The Schedule

    Reasons for decision

    Summary:

    The product is considered to be a ‘beer’ for the purposes of the Excise Tariff Act 1921.

    Detailed reasoning:

    From 28 August 2009 the Schedule to the Excise Tariff Act 1921 provides that:

    • beer means a brewed beverage that  
      • (a)  is the product of the yeast fermentation of an aqueous extract, being predominantly an aqueous extract of cereals  
        • (i) whether the cereals are malted or unmalted; and
        • (ii) whether or not the aqueous extract contains other sources of carbohydrates; and
         
      • (b) contains:  
        • (i) hops, or extracts of hops, such that the beverage has international bitterness units of not less than 4.0; or
        • (ii) other bitters such that the beverage has a bitterness comparable to that of a beverage mentioned in subparagraph (i); and
         
      • (c) contains not more than 4.0% by weight of sugars; and
      • (d) has not had added to it, at any time, artificial sweetener; and
      • (e) may have had added to it, at any time, other substances, including flavours, but only if, in the case of substances that contain alcohol (other than spirit distilled from beer), the alcohol did not add more than 0.5% to the total volume of the final beverage; and
      • (f) may have had added to it, at any time, spirit distilled from beer, but only if that spirit did not add more than 0.5% to the total volume of the final beverage; and
      • (g) contains more than 1.15% by volume of alcohol.
       

    The flavoured beverage produced is the product of the yeast fermentation of an aqueous extract of predominantly wheat malt. The term 'predominantly' is not a defined term within the excise legislation therefore it takes its ordinary meaning of ‘mainly; for the most part.’ The flavoured beverage therefore satisfies the requirement of paragraph (a) of the definition of beer in the Schedule to the Excise Tariff Act 1921.

    During the production process hops is added to your flavoured beverage which has 5 IBU’s. Therefore the beverage satisfies paragraph (b) of the definition of beer in the Schedule to the Excise Tariff Act 1921 as it contains hops and IBUs of not less than 4.0.

    The final beverage does not contain more than 4.0% by weight of sugars and does not have any artificial sweeteners added to it during the production process. After the wheat malt and sugar are fermented the beverage does not contain any sugar. Additional sugar is added later in the production process, measured at 2 grams of sugar per litre. If there is any residual sugar in the beverage after fermentation the quantity of additional sugar added is adjusted to ensure that the final beverage does not contain more than 4.0% of sugars. Therefore, the flavoured beverage satisfies paragraphs (c) and (d) of the definition of beer in the Schedule to the Excise Tariff Act 1921.

    During the production process the following is added to the beverage:

    • 2g of sugar (sucrose) per litre
    • 0.5ml per litre of sodium benzoate (25%) in water (if unpasteurised). This is not added if the beer is to be pasteurised
    • 2.4ml per litre of citric acid (50%) w/w in water
    • 4ml per litre of fruit flavour.

    These additions do not add more than 0.5% alcohol to the total volume of the final beverage, therefore satisfying paragraph (e) of the definition of beer in the Schedule to the Excise Tariff Act 1921. The beverage also satisfies paragraph (f) of the definition of beer in the Schedule to the Excise Tariff Act 1921 as no spirit distilled from beer is not added to the beverage during the production process.

    The flavoured beverage satisfies paragraph (g) of the definition of beer in the Schedule to the Excise Tariff Act 1921 as it contains 4.5% alcohol by volume.

    Having satisfied all of the paragraphs within the definition of beer, the product is considered to be a ‘beer’ for the purposes of the Excise Tariff Act 1921.

      Last modified: 23 Oct 2018QC 54118