Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Based on taxation in accounting Gin distilleries around Australia are producing hand sanitiser Archie Rose is, first and foremost, a spirits company. Over the years,

Based on taxation in accounting

Gin distilleries around Australia are producing hand sanitiser

Archie Rose is, first and foremost, a spirits company. Over the years, the Sydney distillery has built a reputation for producing award-winning gins, whiskeys and rums. Their core product range is found widely in bottle shops and bars; their seasonal releases regularly sell out.

But it's their latest product that's facing unprecedented consumer demand. The distillery, like many others around the country, is producing hand sanitiser in a bid to overcome nationwide shortages.

The first batch, made in early March, was for business use only as the company had trouble sourcing the product for its bar operations. Then came the Federal Government's social distancing crackdowns the limit of 100 people indoors, the closure of pubs, the four square metres per person rule that caused the venue to cease its distillery tours and bar operations, and stand down a large number of staff.

Harriet Leigh, head of hospitality, recalls the weekend in which the company rapidly turned around their operations, and committed to solely producing the liquid sanitiser.

In the past few weeks Brix Distillers and Four Pillars have added hand sanitiser to their product range to help meet shortages while Brisbane Distillery is selling 20-litre bottles of sanitiser at a discounted rate to healthcare workers.

Even Shane Warne yes, the former Test cricketer is doing his bit. His gin company SevenZeroEight has shifted entirely to producing sanitiser for several Western Australian hospitals. "A couple of my business partners are doctors and they're seeing first-hand how horrible it is in hospitals, and how much they need hand sanitiser," he says. The sanitiser is being provided at cost price. "It's just a small distillery in Perth and I wish we could produce more. But we can do what we can do. "

It's been said the COVID-19 pandemic is a health crisis, but an economic crisis too. For Archie Rose, hand-sanitiser production also provided hope for recently retrenched workers. "Some people only had a day of leave accrued, and they were first on the bottling line. Next were those in precarious living situations," says Leigh. The first commercial batch of Archie Rose hand sanitiser was released on 23 March, and sold out in under an hour. "Now we have our whole team employed not one of my full-time staff went a day without work."

The company's first customer was its charity partner Fighting Chance, an organisation that supports people with a disability through social enterprise and workforce initiatives. "Other customers have said they're buying it for their parents, their elderly neighbour," says Leigh. Archie Rose has capped sales at six bottles per customer (this restriction is being reviewed), though it's still a higher threshold than those imposed by the major supermarkets.

The company has temporarily suspended its beverage production to meet the needs of the community (its gin and whiskeys are still available at alcohol retailers). Still, its gin-producing habits can't be helped. The sanitiser recipe is based on guidelines by the World Health Organisation and Department of Health, but is infused with the botanicals that typically perfume Archie Rose gins. Its first commercial batch contains distillates of grapefruit, cassia, cardamom and thyme; batch two is currently in production and includes grapefruit, raspberry and honey.

For Leigh, it's a strange time to be in the food and beverage industry. The hospitality sector is one of the biggest casualties of social-distancing measures, and she's grateful Archie Rose is still operating. "It's surreal but we've got to count our blessings that we're being useful," she says. "It's not like we've just found another revenue source. The fact that it's a required product makes our staff feel like they're doing something important."

Q: You will need to consider what this article is concerned about and what the relevance to the tax system is. For example, is the topic of some event that has occurred to a particular taxpayer(s), or perhaps there is a particular kind of activity that needs consideration? Determine what the relevant tax issues might be.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Accounting

Authors: Carl S. Warren, Philip E. Fess, James M. Reeve, C.Rollin Niswonger, Jim Reeve

18th Edition

0538839333, 978-0538839334

More Books

Students also viewed these Accounting questions