Brewers and winemakers will cheer the excise tax freeze

Labor will freeze the tax grab on excise applied to alcohol in a much-needed shot in the arm to be felt from the front bar to the vineyard.

Winemakers such as Melanie Chester at Giant Steps Winery in the Yarra Valley will have something to cheer about. Picture: Arsineh Houspian

Publicans and makers of wines, beers and spirits finally have something to cheer.

With many drinkers having abandoned them during the cost-of-living crisis, the government has thrown the hospitality and ­alcohol sectors a $165m lifeline.

Starting in August 2025, the tax grab on excise applied to alcohol will be frozen.

The move represents a much-needed shot in the arm felt from the front bar to the vineyard as producers gain some relief from a paused biannual indexation of beer excise until August 2027.

The $165m represents foregone tax receipts ordinarily banked by the government.

Drinkers will also have reason to smile: it should help stop the runaway price of a pint of beer at the local pub, which is normally ratcheted up twice a year to match the rising booze tax.

Adding to the support scheme, small and struggling winemakers, which are key employers in regional Australia, and craft spirit makers will gain access to a $50,000 increase in their respective industry rebate schemes.

De Bortoli vineyards in Yarra Valley in Victoria.

Heralded by the Albanese ­government as supporting the hospitality sector and alcohol producers, the budget papers have detailed increased support for hospitality venues, brewers, distillers and wine producers in the sweeping fiscal boost. This is aimed at “supporting local jobs and regional tourism”, the budget papers state.

Under this measure, the scheduled increases of August 2025, February 2026, August 2026, and February 2027 will not occur. Biannual indexation will then recommence from August 2027.

Meanwhile, the budget will increase support available under the existing excise remission scheme for manufacturers of alcoholic beverages and the Wine Equalisation Tax producer rebate.

Currently, all eligible brewers and distillers can receive an excise remission up to a cap of $350,000, while all eligible wine producers can currently receive a WET rebate up to a cap of $350,000 under the producer rebate.

In his budget speech, Jim Chalmers said the government would back small and local businesses – such as pubs and boutique ­alcohol producers – amid difficult economic conditions and sacrifices made by owners in these industries.

“Which is why we’re going in to bat for small and local businesses in this budget … and delivering tax relief for hospitality venues, brewers, distillers and wine producers,” the Treasurer said

The budget support comes as dozens of craft brewers have collapsed over the past two years, with most blaming the strangulation of excise charges and the final price paid for a beer at the pub for their insolvencies.

The wine sector is a key export driver, especially now China has reopened for business with the scrapping of its punitive tariffs on Australian wine.

For Australia’s $45bn wine sector, the budget support follows a near-death experience when the Chinese government imposed – but later lifted – crushing tariffs that kept Australian wines locked out of its biggest market. Spirit producers, whether they were distilling whisky in regional Tasmania or rum in Bundaberg, saw the price of their products escalate beyond the reach of many consumers as taxes dominated the make-up of the shelf price.

Pubs and restaurants have also shuttered as diners are disincentivised from ordering a glass of wine or nip of local whisky.

The $50,000 increase in rebates for wine producers will be especially helpful to businesses, investment and jobs in rural and regional Australia, where most wineries are located. There are ­estimated to be 2156 wineries and approximately 6000 grape­growers employing some 164,000 full and part-time employees in 65 regions around Australia.

The wine sector is a key export driver, especially now China has reopened for business with the scrapping of its punitive tariffs on Australian wine. It is also a sector where many smaller, single vineyard and family-owned wineries can find a loyal following from local and overseas drinkers, but where the Wine Equalisation Tax rebate is crucial in helping them make ends meet.

Originally published as Brewers and winemakers will cheer the excise tax freeze