‘Un-Australian’: Industry leaders call out government amid booze price increase

Industry leaders have taken aim at the government as the latest alcohol price excise kicks in today, with the tax branded “un-Australian”.

Industry experts are pleading with the government to put an end to the twice yearly alcohol price increase, with the latest hike kicking in today.

Excise duty rates levied on alcohol are indexed every six months, with adjustments made in accordance with the upward trajectory of the Consumer Price Index (CPI).

Usually, indexation occurs on 1 February and 1 August. However, when the Australian Bureau of Statistics doesn’t publish the CPI figure at least five days before indexation day, the day is effectively pushed back to the fifth day after publication.

This means that from today, February 3, the alcohol excise will increase by a factor of 1.004, marking the 84th hike since the excise was introduced in 1983.

This means that beer with alcohol above 3.5 per cent in an individual container less than eight litres increases to $61.57 per litre, up from $61.32.

The pub beer tax will increase to $43.39 per litre for beers exceeding 3.5 per cent, up from $43.22.

Spirits and other beverages excisable 10 per cent by volume of alcohol will increase from $103.89 per litre to $104.31.

Industry leaders have called out the government amid the latest alcohol price increase. Picture: iStock

In comparison, the spirits excise in the United States is currently $14.54 ($US9.10) per litre of alcohol, according to a report from the United States Department of Agriculture (USDA).

Those in the Australian distilling and brewing industry have been left less than impressed by being hit with yet another price increase.

Australian Hotels Association has branded the excise a “hidden” tax, claiming it is quietly impacting Australians who are already struggling with the cost of living crisis.

CEO Stephen Ferguson said the excise delivers $6.2 billion of “drinkers’ money to Canberra”, noting this is budgeted to skyrocket by another $800 million by 2027.

“That’s money out of people’s pockets who can’t afford it. Everyone knows a dripping tap should be turned off,” Mr Ferguson said.

“That’s what we want to see, a fair go for the men and women who enjoy a beer or gin and tonic at their local pub – not a hidden tax designed to increase by small amounts that goes up twice a year.

“Australia’s beer tax is already the third highest in the OECD. There’s also $38 tax on a $60 bottle of whisky or gin. That is outrageous and the voters are awake to it.”

Industry leaders have also lashed out at Treasurer Jim Chalmers after he warned pubs not to rip off Aussies amid the looming price increase.

Last week, Mr Chalmers claimed the tax increase would equal less than one cent per pint, warning pubs, clubs and bottle shops not to use the excise as an excuse to raise prices higher than necessary.

“The extra excise on a schooner next week is less than one cent and don’t believe anyone who tries to tell you otherwise,” he said, according to The Daily Telegraph.

“Drinkers are doing it tough enough without being ripped off or lied to.”

Treasurer Jim Chalmers issued a warning to pubs and clubs not to ‘rip off’ consumers over the price increase. Picture: John Gass/NCA Newswire

However, the Independent Brewers Association hit back at Mr Chalmers, claiming their outrage wasn’t specifically about today’s increase, instead relating to the fact the excise has been imposed every six months for decades, with “no end in sight”.

The group claimed the average price for a 425ml glass of beer at a venue in Australia has increased by 6.2 per cent in the last 12 months and beer prices have gone up by 10.5 per cent since the start of 2022.

Approximately 21 per cent of the price of a full strength six pack is tax.

“In the period since January 2023, at least 47 breweries have entered voluntary administration or closed their doors. We estimate the true number to be much higher than that as a result of quiet and unpublished closures,” the Independent Brewers Association said in a statement.

“As we head into the election this year – independent breweries and their communities are going to be demanding that their new government take action to give small independent brewing businesses a fair go.

“Decades of unfair and stifling regulation means that beer made by an Australian owned small business is becoming unaffordable – at the pub, at your local brewery or over a BBQ in your back yard. And frankly that’s un-Australian.”

Spirits & Cocktails Australia chief executive, Greg Holland, said that the latest excise increase has failed to alleviate the burden of having the third highest excise rate in the world.

He said while the inflation figures were “excellent news for the broader economy”, the fact remains that spirits tax is now 20 per cent higher than it was before inflation took off during the pandemic.

Australian Distillers Association chief executive, Paul McLeay, said the government’s persistence with six-monthly tax increases is at odds with its economic goals.

“There are 700 spirits manufacturers in Australia, half of which are based in regional areas. With the right policy settings, the Australian spirits industry can deliver $1 billion in exports in the next decade,” he said.

“That’s why we’re calling on the Federal Government to provide immediate support by freezing spirits excise and working with us to accelerate spirits exports.

“Not only will this deliver on the Government’s trade diversification goals, but it will also support the economic priorities of growing domestic manufacturing and increasing employment opportunities, particularly in the regions.”

Originally published as ‘Un-Australian’: Industry leaders call out government amid booze price increase