Craft brewers get ahead, but some spirits are still dampened

May 8, 2018

Craft beer could get cheaper thanks to a tax cut announced in this year’s Federal Budget.

From 1 July 2019, brewers and distillers will benefit from an increase in the alcohol excise refund cap, from $30,000 to $100,000 per financial year.

Beyond that, concessional excise rates will apply to kegs 8 litres or greater, up from 48 litres or greater for draught beer.

Currently, draught beer sold at licensed venues such as pubs and clubs in containers larger than 48 litres is taxed at lower rates than beer sold in smaller kegs. The change means craft brewers, which typically use smaller sized kegs, can now benefit from the lower rates.

“This is great news for independent brewers, great news for consumers and great news for job creation,” says Ben Kooyman, the Chair of the Independent Brewers Association.  

“Australia’s 450 small, independent brewers will be able to increase their production, invest in quality improvement and most importantly hire more staff to join over 2,400 Australians the industry already employs.

“It will also allow them to win clients in smaller venues and in distant markets. And dealing with full 50 litre kegs is one of the biggest workplace health and safety issues in many breweries.”

However, different tax treatment of beer and wine compared to spirits (which are taxed at almost $84 per litre of alcohol – about 20 times higher than wine), means that distillers are still waiting for the government to heed their call for equity.

Stuart Gregor, co-founder of Four Pillars Gin and President of the Australian Distillers Association says there would be two more tax increases before this rebate is introduced and another a month later.

“While the increased refund is welcome news, we need to wean the government off the twice yearly CPI increases in spirit tax which effectively whittles away the rebate even before it is introduced,” Gregor says.  “The last increase in tax on wine was now 15 years ago and in that period we would have had 30 increases.

“We would just ask that the government next year to go one step further and streamline alcohol tax to treat beer, wine and spirits the same as happens in every other advanced economy. The wine industry has had a full generation of tax handouts and effective real tax decreases while spirits is essentially the opposite.”


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