Des Houghton: Many distillers simply won’t survive latest spirit excise tax hike

Australian distillers – who pay the third highest tax in the world – reckon if wine were taxed as highly as spirits, there would be riots in the streets, writes Des Houghton.

Our hungry tax collectors this week decreed we should pay more for our gin, rum, whisky and other spirits.

The jump in Australia’s spirit excise tax is a threat to the nation’s 400 distillers.

Many of them would not survive, award-winning distiller David Ridden told me.

I quaffed some very good gin at Ridden’s Granddad Jack’s distillery in trendy Collingwood St at Albion in Brisbane’s inner northeast the day the new tax was revealed.

Ridden, a self-made man who left school at 14, built his first Granddad Jack’s at Miami on the Gold Coast before expanding to Brisbane.

Australian distillers paid the third highest tax in the world, he said.

David Ridden of Granddad Jack’s distillery in Albion.

“Excise on spirits is a strange tax,” he said.

“It’s indexed to inflation and it rises twice a year. That means that when the ATO released the latest CPI figures this week, we were smashed again.

“If wine was getting taxed as hard as spirits, there would be riots in the streets.

“Excise was $84.51 a litre of alcohol when we started in 2018. This week’s increase pushed it well over $94.

“The tax office makes three time more money that we do on every bottle.’’

Greg Holland from the Spirits and Cocktails industry group agreed.

He told me (over a coffee, believe it or not) that this week’s tax leap was a crippling “double-whammy” for distillers and spirits manufacturers paying more for freight, glass, cans and raw materials.

The new tax translates to an additional $1 of tax to be paid on an average 700ml bottle of spirits (40 per cent ABV).

Said Holland: “It’s the biggest increase in almost 50 years, since our tax figures were updated in 1978, and in that time, spirits manufacturers have been slugged with the GST and the RTDs (ready-to-drink) tax as well.’’

David Ridden of Granddad Jack’s distillery in Albion.

The high tax rate has been condemned by independent and government reviews.

“It is also important to remember government data shows most Australians are drinking more responsibly, often choosing to enjoy quality offerings like a gin and tonic, bourbon and Coke, dark and stormy cocktail, or a good scotch or Australian whisky,” Holland said.

Back in his Granddad’s Jack tasting room at Albion, Ridden is consoled by the news that his Barbershop Coffee liqueur has just claimed double gold at San Francisco world spirits competition. It is infused with coconut and vanilla.

It’s great on the rocks or drizzled over ice cream. Ridden offers five different spirits.

The company takes its name from Ridden’s beloved grandfather Jack, who died aged 93 in 2012.

“He didn’t have a childhood,” he said. “His father died from wounds in World War I and he has to care for the family from a very young age.’’

Jack Ridden grew up on a farm but was a barber for 47 years.