Both sides of politics have botched the vote on the Government's increased alcopops tax, but the measure has now been blocked by the Senate.

The bill was sent to a second vote in line with Senate tradition after initially being passed when Northern Territory Country Liberal Nigel Scullion missed the first division.

A Labor senator then missed the second vote but the bills were ultimately blocked because the Government failed to convince Family First Senator Steve Fielding to support the measure.

Senator Fielding's decision to defeat the measure will cost the Government $1.6 billion which it had expected to collect from the increase in tax on pre-mixed drinks over the next four years.

Senator Fielding voted against the bill after failing to persuade the Government to crack down on alcohol advertising in sports programs.

The Greens and Independent Senator Nick Xenophon yesterday agreed to support the measure, which the Government had argued was needed to tackle youth binge drinking.

But Senator Fielding accused the Government of using the law as a tax grab.

The defeat of the bill may also mean the Government will have to hand back hundreds of millions of dollars it has already collected since it gazetted the law last April.

Senator Scullion apologised to the Senate for missing the first vote.

"It was an inadvertent error; I was caught in a stairwell having an impromptu meeting."

Federal Health Minister Nicola Roxon says the Senate's vote is disappointing and means the drinks will shortly be cheaper again.

Ms Roxon has rejected an Opposition offer to do a deal that would let the Government keep the $300 million already raised by the higher tax.

"If the Liberal Party didn't want to return this money to the industry they should have supported our bill," she said.

"What he is proposing is simply an idea of the distillers, which is to take some small hit now and ensure their profits years into the future.

"We are not prepared to do that; we believe that this was a sensible tax [because] it was putting all spirit products onto the same tax base."

A report released this week by the Senate Standing Committee on Community Affairs found that it was too early to tell whether the tax increase had resulted in a decrease in binge drinking levels.

The Distilled Spirits Industry Council (DSICA) welcomed the Senate's decision to reject the tax.

"The Senators who made the right decision in rejecting the Government's tax grab on RTDs realised that a tax was not a solution to problem drinking," the Council's Stephen Riden said.

"Now is the time that all parties start working together to create a community-wide, comprehensive approach to the issue.

"Senator Fielding demonstrated a sensible, practical approach to alcohol policy-making in this country by voting down a measure that was flawed from the outset.

"The Government should also be recognised for placing harmful and binge drinking on the political agenda, and the impetus for change must be embraced by all groups who have participated in the RTD (ready to drink) tax debate."