Issue
Does the addition to beer of a flavour containing hops and spirits derived from the fermentation of malt, sugar and water constitute the addition of alcohol from any other source and thereby prevent the beverage from being 'beer' as defined in item 1 of the Schedule to the Excise Tariff Act 1921 ?
Decision
No. The addition to beer of a flavour containing hops and alcohol derived from the fermentation of malt, sugar and water does not constitute the addition of alcohol from any other source. Therefore, the addition of the flavour does not prevent the beverage from being 'beer' as defined in the Schedule to the Excise Tariff Act.
Facts
A beer base is manufactured which conforms with the definition of 'beer' in the Schedule to the Excise Tariff Act.
A flavour is added to the beer base.
A component of the flavour is alcohol derived from the yeast fermentation of malt, sugar (a carbohydrate) and water.
The flavour also includes hops.
The flavour contains less than 1% by volume of alcohol.
Reasons for Decision
Section 5 of the Excise Tariff Act specifies that duties of excise will be imposed on all goods manufactured or produced in Australia and specified in the Schedule to the Excise Tariff Act. Item 1 of the Schedule includes beer.
Beer is defined in the Schedule as a brewed beverage which: (a) is the product of the yeast fermentation of an aqueous extract of malted or unmalted cereals, whether or not containing other sources of carbohydrates; and (b) contains hops, or extracts thereof, or other bitters; and (c) has not had added to it, at any time, any alcohol from any other source; and (d) contains more than 1.15% by volume of alcohol.
The beer base meets the requirements of (a), (b) and (d) above. These requirements will continue to be satisfied once the flavour is added.
Therefore, the resulting beverage will be beer provided the addition of the flavour does not result in the addition of any alcohol from any other source.
The alcohol contained in the flavour which is added to the beer is derived from the yeast fermentation of malt, sugar (a carbohydrate) and water.
The term 'from any other source' in paragraph (c) is interpreted as meaning from a source other than the process described in paragraph (a).
Therefore, alcohol is not 'from any other source' if it results from the yeast fermentation of an aqueous extract of malted or unmalted cereals, whether or not containing other sources of carbohydrates.
In this instance, the alcohol contained in the flavour results from the yeast fermentation of an aqueous extract (that is, one containing water) of malted cereals (malt is a collective term for malted cereals). Therefore the requirements of paragraph (a) are satisfied.
Although paragraph (a) requires that beer must be the product of 'an aqueous extract...', we accept that a beverage may still be considered beer, notwithstanding that it contains more than one aqueous extract, provided each extract is produced in the requisite manner.
As the alcohol contained in the flavour which is added to the beer base has been produced in accordance with the requirements of paragraph (a), it follows that the addition of the flavour to the beer base does not constitute the addition of alcohol 'from any other source'.
Thus the addition of a flavour containing alcohol which is derived from the fermentation of malt, sugar (a carbohydrate) and water to a beer base will not exclude the final product from being classified as 'beer' as defined in the Schedule to the Excise Tariff Act.