Brewers call on the federal government to follow their UK counterparts and slash the amount of beer tax hurting the industry

Aussie brewers are calling on the government to follow their UK counterparts and slash a controversial tax they say is crippling the industry.

Leading Australian brewers have called for a controversial beer tax to be slashed over fears it could kill one of the country’s most lucrative and well-loved industries.

Brewers have faced growing uncertainty in the past 18 months as ever increasing alcohol excises and rising costs crippled about 20 independent brewers post Covid, following a decade of success in the craft beer sector.

Independent Brewers Association chief executive officer Kylie Lethbridge said these excise hikes might be able to be absorbed by the foreign owned duopoly that controls the Australian beer market – but independent brewers were different.

“Our breweries cannot keep absorbing the ballooning costs of making beer without increasing the price of their beer – this means, being able to support your local will be soon out of reach for many and job losses will continue,” she said.

“Every cent that independent brewers spend on excise is money they cannot invest back into their staff, innovation, sustainability or supporting their communities.

The Beerfarm is expanding its production capacity after a development application was approved to establish a new brewery and tap house in Glenworth Valley, NSW. Picture: Supplied

“Australia is the third highest taxed beer producing nation in the world, and we’re one of the most regulated in terms of state and federal legislation, it makes it really difficult to be successful.”

Economic analysis by the association found independent brewers contributed $3.5bn to the annual economy and employed more than 40,000 people across Australia.

It also supported other industries such as manufacturing, agriculture and logistics.

Ms Lethbridge said the last 18 months had been challenging because of regulations, high tax and cost of living issues.

“It’s quite difficult for any government to approach, to pull it apart and start again but it’s coming to a tipping point,” she said.

The UK Government slashed alcohol tax for the first time in more than 140 years last August, then froze alcohol duty for six months this year to support the industry through rising inflation.

Exchequer Secretary to the Treasury Gareth Davies said the great British pub remained a critical part of communities across the UK and they wanted to help keep costs low.

“Our decisive action has also helped to more than halve inflation last year, protecting pubs and other businesses from the higher costs they would have otherwise faced,” he said.

Japan and Canada has also took similar action to alleviate tax pain for its brewers with reduced rates – with Canadian brewers provided up to almost $87,000 in tax relief this year.

Beerfarm founder Ian Atkins said they were not immune from the challenges confronting Australia’s craft beer market and hoped the government would address some the issues that were quite blatant in the industry. Picture: Supplied.

Beerfarm founder Ian Atkins said they were not immune from the challenges confronting Australia’s craft beer market and hoped the government would address some the issues that were quite blatant in the industry as they worked towards opening their second venue.

“It’s tough,” he said.

“Australia has the third highest excise for alcohol in the world which is ludicrous for a beer drinking culture.

“England took the stance to give reprieve through excise remission and put a hold on excises to try and help its industry, but it doesn’t seem to be coming from the Australian Government.”

The Beerfarm will expand its production capacity at a new site in Glenworth Valley that will make up to 2 million litres annually that will supply their beers throughout the East Coast. Picture: Supplied,

The award-winning brewer, located in WA’s southwest, recently had a development application approved to establish a second production facility and tap house in Glenworth Valley on the NSW Central Coast.

The production capacity is tipped to make up to 2m litres of beer annually, which will supply Beerfarm beers throughout the east coast and increase its national product volume by 30 per cent.

The brewers hope the new facility replicates the success of its flagship venue, with the brewery due to open mid next year followed by a venue open to the public in 2026.

“When we set off on this journey the market was different and we’re very cognisant of that, there’s a lot of people out there who are doing it tough, but we still believe this is the this is the right strategy for us,” Mr Atkins said.

“It’s a question of when it gets tough you’ve got to get down and make it happen.”

There are fears Australia’s beer tax could further cripple the industry itPicture: NewsWire / John Gass

Brewers Association chief executive John Preston said the British Government recognised the pain and damage that has been inflicted on the UK’s hospitality sector.

“As other countries cut their beer tax to help the hospitality industry or ease pressure on consumers ours still goes up twice a year,” he said.

“We are totally out of step on beer tax with comparable countries like the UK and on a different planet from major beer producing nations such as Germany, the US and Belgium where the rate is less than a quarter of what we pay here.”

Page MP Kevin Hogan told a parliamentary chamber that 60 per cent of the cost of a packaged full-strength beer and 47 per cent of a mid-strength beer was now tax.

That price is due to rise again in February when the government is next scheduled to increase its alcohol excise.

“I think most people would understand that the excise we put on alcohol goes up twice every year and that it has been doing that for 30 years, so the compounding effect of these price increases is obviously making many things unaffordable,” Mr Hogan said in the chamber.

“As I know — we all know — that the intention of this, when it was brought in, was good.

“The intention was to discourage anti-social behaviour or to discourage behaviour that would not be good for your health, but I think we have gone beyond that now.”

Lynne MP David Gillespie said he would call on the treasurer and finance minister at the next budget to announce a freeze on alcohol excise to keep local brewers and distilleries operating. Picture: NewsWire / John Gass

Lynne MP David Gillespie said he would call on the treasurer and finance minister at the next budget to announce a freeze on alcohol excise to keep local brewers and distilleries operating.

“The value of small breweries and distilleries is that there’s not some distant faraway shareholder that’s taking profits out of the business; all the people working in them live locally and all the money circulates into the local economy,” he said.

A spokesman for the Treasurer said alcohol excise was a usual, legislated, automatic indexation change that happened twice a year under governments of both persuasions.

“We listen respectfully to ideas put to us but these have to be weighed up against other priorities and within the budgetary constraints we inherited from the Coalition including a trillion dollars of Liberal debt,” the spokesman said.

Originally published as Brewers call on the federal government to follow their UK counterparts and slash the amount of beer tax hurting the industry