Coopers boss calls for review into beer excise scheme

Beer taxes have spiralled out of control, according to Coopers boss Tim Cooper, who’s calling for an urgent freezing of the government excise.

Coopers managing director Tim Cooper. Picture: Supplied

Taxes on Australian beer have spiralled out of control, according to Coopers boss Tim Cooper, who is calling for an urgent freezing of the government excise that has surged in line with rising costs across the economy.

Figures provided by Australia’s largest independent brewer show that it paid $152m in excise duties in the year to June, applied at a rate 21 per cent higher than in 2019.

The excise on beer is linked to the Consumer Price Index, and adjusted twice annually.

Mr Cooper said the scheme was no longer “fit for purpose”, and had made Australia one of the world’s third highest taxed countries.

“We have become now the third highest taxed for beer in the world after Norway and Finland, which are jurisdictions that have a very strong anti-alcohol approach,” he said.

“The system should be reviewed to see whether it’s fit for purpose. I don’t think it is. The fact that wine is subject to a completely different form of taxation, namely the WET (Wine Equalisation Tax), gives a big advantage to wine over beer and spirits.

“There’s this six monthly indexation and we would love to see it stop, or at least have a pause. It’s very convenient for governments to have things indexed to inflation, because then they can say, ‘Oh well, it’s not us, it’s just the system’.”

The WET is applied at a flat 29 per cent on the wholesale value of wine, shielding it from the excise increases that have surged in recent years in line with higher inflation.

The last update to the beer excise in August resulted in a 2 per cent increase in the excise on beer products.

Tim Cooper at the new visitor centre at Coopers Brewery. Picture: Supplied

The Australian Hotels Association and the Brewers Association – which Dr Cooper chairs –are calling for a 40 per cent reduction to the excise on keg beer in a bid to stimulate pubs and other hospitality venues struggling as consumers cut their discretionary spending.

The Coalition is considering an overhaul of beer excise in response to the industry’s concerns.

Despite rising prices for a pint, and behavioural changes that are seeing a reduction in beer consumption globally, Coopers was able to lift its sales volumes in the year to the June, on the back of stronger sales of its flagship Original Pale Ale and its new Australian Lager.

Total beer sales were up 1.5 per cent to 78.7 million litres, despite the challenging market conditions that have seen a 2.6 per cent contraction in the national beer market.

Keg sales, which represent 12 per cent of total sales of Coopers beer, were 1 per cent higher, while packaged beer sales were up 1.6 per cent and can sales increased to represent 43 per cent of total packaged sales.

Dr Cooper said the Australian Lager, launched in August last year, had been received particularly well by customers, and had become the second highest selling Coopers product on tap behind its Pale Ale.

“It’s been a standout performer,” he said.

“Certainly that appeals to what is, in Australia, a very large lager market. Nearly 90 per cent of the beer is lager so it’s an important segment of the whole category that we need to perform well in.”

Coopers’ total sales revenue, net of discounts, rebates and excise duties, reached $308m in 2023-24, up 7.3 per cent from the previous year.

Profit before tax was $32.8m, up from $28.5m, and a dividend of $12 per share was paid in the financial year, unchanged from last year. The company’s shareholders are primarily members of the Cooper family.

While pleased with the result, Dr Cooper conceded it was becoming an increasingly challenging market amid the cost of living crisis and a global decline in beer consumption.

“The national beer industry continues to face significant challenges,” he said.

“The rising cost of living and cost of business, including the excessive tax on beer, are placing considerable pressure on all participants in the beer category, and have led to the closure of smaller operators and hospitality venues across the country.

“While not immune to these pressures, Coopers has continued to expand our product portfolio and invest in our brands, operations and people for the long term.”

Dr Cooper said the company’s new $70m visitor centre at Regency Park had enjoyed strong visitation since its opening in August.

The Coopers Foundation awarded more than $650,000 to 19 charities in 2023-24, taking the total donated to nearly $7.9m since it was formed in 2006.