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Economic Indicators - Assignment Example

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Economic Indicators Discussion Emphasising on the macro-economic indicators of Australia, the discussion henceforth analyses the long term statistical data of the pure alcohol available for consumption from alcoholic beverages and the per-capita consumption of such commodities…
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Economic Indicators Discussion Emphasising on the macro-economic indicators of Australia, the discussion henceforth analyses the long term statistical data of the pure alcohol available for consumption from alcoholic beverages and the per-capita consumption of such commodities. The graphical indicators of the trend have been presented below: Figure 1: Apparent Consumption of Pure Alcohol (Australian Bureau of Statistics, 2012) The trend depicted above states that the portion of pure alcohol available for the consumption in the form of beer has decreased almost by 50%, i.e. from 76% in 1961 to 42% in 2011. On the contrary, the consumption of pure alcohol available in the form of wine has increased substantially from 12% in 1961 to 37% in 2011. During the same period, the percentage of pure alcohol available for consumption in the form of spirits has also increased from 12% to 20% (Australian Bureau of Statistics, 2012). This statistical presentation apparently depicts that consumer consumption pattern differs largely on the basis of the product category in Australia apart from other variables such as price, taste and variety. Figure 2: Apparent Consumption of Pure Alcohol Per-Capita (Australian Bureau of Statistics, 2012) Over the last fifty years, the total percentage of apparent consumption of pure alcohol per-capita has also depicted a certain degree of fluctuation. During 1960s, the apparent per-capita consumption of the pure alcohol increased steadily reaching its record heights in the early 1970s. However, since mid 1970s, the total per-capita consumption began declining through the period of 1980s and continued during the initial few years of 1990s. Consequentially, during the early 1990s, the total per-capita consumption of the pure alcohol was at its lowest. Since mid 1990s, the total per-capita consumption of the pure-alcohol again took a pace; however, not necessarily at the same speed as in the 1960s. Apparently, since last few years, i.e. from 2010 till 2011, the total per-capita consumption can be observed to again decline (Australian Bureau of Statistics, 2012). Analysis of the Trend By analysing the data presented through Figure 1, it can be revealed that constant decrease in the percentage of pure alcohol available for consumption in the form of beer is primarily due to the excise taxation charged in Australia. In the Australian context, as the tax is imposed on the bases of the alcohol strength, i.e. low, high and full strength beer qualities, the available beer brands are likely to incur higher variable costs in terms of taxes than that compared to other alcohol products. It is due to this reason that in order to substantiate the increased production costs due to taxation charges, the producers in the alcohol industry of the country tends to increase their selling price maintaining their profit margin which in turn inhibits the consumption patterns of the consumers (Carragher & Chalmers, 2011). The analysis of Figure 2 again depicts that in recent years, the decrease in the per-capita consumption of pure-alcohol has been primarily due to the changes in the customers’ taste. The affordability of the alcohol prices can be regarded as another factor attributing towards decreasing consumption of alcohol in Australia. The Australian households are today observed to be spending proportionately less on alcohol than they used to be in 1960s. Stating precisely, as the price of beer depends on its alcohol contains in accordance to the tax imposed, households in the current macro-economic environment of Australia have been observed to shift their focus on spirits and wines which are mostly served at constant prices and therefore requires comparatively lesser investments (Australian Government Department of Health And Ageing, 2012). Hence, it is majorly due to this reason that the shift in pure alcohol consumption pattern per-capita has become quite apparent in the current day context. Impact on the Anheuser-Busch Companies, Inc Tax policies in Australia have always attracted the attention of brewery companies. The likely impact of the above stated taxation policy have thereby forced the companies to increase the prices of its products due to their inability to absorb the tax charged on the commodity. Contextually, the hike in the prices due to the increased tax rates can further be identified to challenge the revenue earning capacity of the company by a certain degree. The company, in order to prevent the fall in the revenues caused by the increasing taxation rates and the decreasing demand due to the hike in the prices of its products, must track with low carbonate and low alcohol contents in its commodities maintaining a stable profit margin. Furthermore, the company will have to reduce the transaction costs and other production related costs to keep the prices within the customers’ affordability. However, it is quite likely that the changes in the consumption pattern shall also impact the company on its revenue earning capacity. References Australian Government Department of Health and Ageing. (2012). Key trends in alcohol Consumption. Retrieved from http://www.health.gov.au/internet/preventativehealth/publishing.nsf/Content/09C94C0F1B9799F5CA2574DD0081E770/$File/alcohol-2.pdf Australian Bureau of Statistics. (2012). Apparent Consumption of Alcohol, Australia, 2010-1. Retrieved from http://www.abs.gov.au/ausstats/abs@.nsf/Latestproducts/4307.0.55.001Main%20Features72010-11?opendocument&tabname=Summary&prodno=4307.0.55.001&issue=2010-11&num=&view= Carragher, N. & Chalmers, J. (2011). What are the options? Pricing and taxation policy reforms to redress excessive alcohol consumption and related harms in Australia. Retrieved from http://www.lawlink.nsw.gov.au/lawlink/bocsar/ll_bocsar.nsf/vwFiles/R59a.pdf/$file/R59a.pdf Read More
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