Lion boss Sam Fischer urges the government to freeze its biannual tax increases on beer

Beer drinkers now pay almost $20 in tax when buying a slab and the boss of brewing giant Lion says the twice yearly excise hikes should be halted.

The boss of Australia’s second largest brewer, Lion, wants the federal government to partially pause inflation-linked beer tax rises that is sending the price of a schooner through the roof and threatening the viability of some rural pubs

Lion chief executive Sam Fischer, who oversees a portfolio of beers, ciders and spirits led by powerhouse beer brands Tooheys, XXXX, Furphy, Hahn and Little Creatures, said that although consumers still enjoyed a beer – despite mounting cost-of-living pressures – steeper beer prices were threatening that pleasure and the government should review the excise.

“That affordability challenge is something that we have had to lean into for a long period of time and we have made a strong case to show that parts are doing it tough, particularly in regional and rural areas,” he said.

“The government should consider at least the partial freeze on CPI so that communities can get together and enjoy moments together down at pubs.

“That is something that we as an industry and the Australian Hotels Association have lent into, and that’s the core elements of the case that we’ve made.

“We are continuing to try to make sure we make it (beer) as accessible as we possibly can.

Lion chief executive Sam Fischer. Picture: Michael Quelch

“We work with the various associations to ensure the government is understanding the impact that it is having on families.”

The inflation-linked excise on beer is increased every six months and the latest tax rise in February added another 3.7 per cent to the price and – making the average price of a schooner bought at a bar $12.

Thanks to high inflation, the amount of tax on a slab of beer has gone up by about 8 per cent over the past six months. Beer drinkers now pay almost $20 of excise when buying a slab and nearly 90c of tax on a beer at a pub.

Biannual tax increases on beer are threatening the viability of some country pubs. Picture: Mark Evans

But for the federal government it is a useful money earner at a time of budgetary constraints. Last year beer drinkers contributed almost $2.5bn in taxes.

“We have twice yearly (excise) reviews which are in response to CPI and what we are saying is that we would like to have a freeze, or partial freeze, through the cycle,” Mr Fischer said.

Inflationary pressure was especially felt in country pubs where beer is the anchor product that keeps some of those businesses afloat. Beer sales consistently averaging about 70 per cent of alcohol sales by volume in venues.

“Most pubs in regional areas are a part of the community, and where they are experiencing significant CPI increases that erodes accessibility for their consumers,” Mr Fischer said.

Lion, the owner of beers such as XXXX and Tooheys, has launched a brand refresh for its leading labels. Picture: Brendan Radke

He said inflationary pressures on Lion had started to cool, but in other cost centres such as energy there were elevated prices and the brewing company was working hard on productivity and efficiency. But where costs could be not be countered by productivity gains, Lion had been forced to raise its prices.

Within its beer portfolio, Lion was focusing on new advertising and innovation, including a brand refresh for its second largest brand Tooheys, and for Queensland brand XXXX.

Furphy is one of Lion’s fastest-growing beer brands.

In its craft beer portfolio it was seeing strong growth from its recently acquired Stone & Wood.

“Job number one for me is to strengthen our core brands, to drive relevance with our target consumer and to innovate so that we can tap into some of the green shoots,” Mr Fischer said.

“We will continue to actively manage the portfolio and where we see gaps or opportunities that support that strategy then we will look at what we need.

“But the first job is the core; make sure that core is healthy, make sure we have got the right level of investment behind it so we are driving future growth.”

Originally published as Lion boss Sam Fischer urges the government to freeze its biannual tax increases on beer