Why you’ll be paying more for booze in 2025

Enjoying a spicy margarita or an ice-cold beer by the beach is set to get more expensive this year, and you won’t guess the odd reason behind the price hike.

Glass bottle prices have gone through the roof, which is affecting small distilleries, wineries and breweries. Picture: Adam Head

Australians are set to pay more for their favourite bottle of booze, thanks to the rising cost of glass compounded by the annual alcohol excise increase kicking in next month.

Glass bottle prices have reportedly gone through the roof for many local distilleries, breweries and wineries, with the average bottle costing 20 per cent more than two years ago, with an additional 13c charge per vessel for the container exchange refund scheme.

Behind the jump are escalating electricity and power prices to make the bottles, as well as the poor Aussie dollar, with spirit bottles in Australia imported from either Europe or China.

David Ridden, owner of Granddad Jack’s distillery in Miami on the Gold Coast, said rising glass costs were crippling small distilleries like his, with prices having risen dramatically since Covid.

“These price hikes are really killing us because we can’t pass that margin on to the consumer because it’s tough for the consumer right now and they won’t pay that,” he said, revealing he charged between $75-$95 a bottle for his spirits, when they should be about $130.

Granddad Jack's owner David Ridden at his Miami brewery. Picture: Adam Head

“We’re under a heap of pressure with the cost of glass and the cost of shipping.”

He said to cut costs he was having to order a year’s worth of bottles at a time to get a bulk order discount, but then had the issue of trying to store them at about $295/sqm.

“We’ve got a year’s worth of outlay upfront … so it’s not only hurting us from the cost of glass, but it’s really, really hurting us from a cash flow point of view because the cost has gone up but we still need to buy in bulk to get any kind of savings,” he said.

“We’re just getting squeezed as manufacturers everywhere, which is super challenging.”

Felons Brewing Co have also seen the cost of glass bottles for their premium barrel-aged beers rise, with it now accounting for 5 per cent of the wholesale price.

Felons brand director Dean Romeo said they were forced to pass that rising cost onto consumers.

“Costs of materials overall have gone up dramatically and it does make things challenging when producing our beer,” he said.

But even more concerning for booze producers was the upcoming twice-yearly alcohol excise increase on beer and spirits, which will come into affect on February 3.

The tax rise will add roughly an $1 to every drink.

Beer lovers are about to feel the pinch.

CEO of the Brewers Association of Australia John Preston said on a $50 slab of beer, about $25 was tax.

“With inflation being as high as it is, those increases are really hurting,” he said.

“We’ve just seen record breaking increases over the past few years and that’s piled on the pressure for anyone who enjoys a bottle of beer and who runs a pub or a bottle shop.”

A spokesman for alcohol giant Lion said increasing glass costs were just the latest in an influx of rising prices including energy, labour, materials and ingredients, but said the twice-yearly excise increase was the most damaging for business.

“These … increases are out of step with other major markets, are damaging Australia’s pubs and clubs and are unfairly punishing responsible Australian beer drinkers,” he said.

Mr Preston said he hoped the federal government would follow the lead of the UK government, which has cut draught beer taxes to save the hospitality industry. While Mr Ridden said if some relief wasn’t introduced, we would see some small distilleries go to the wall.

“People are trying to hang in there, but my gut feeling is unfortunately we’re going to see some carnage come the second quarter (of the year),” he said.