Distillers and brewers at war with Albanese government over booze tax hike

With taxes on spirits and beer to increase under a six-monthly tax hike tied to inflation, the founder of one of the best bars in the world has called for booze taxes to be “drastically” cut.

The founder of one of the best bars in the world has called for booze taxes to be “drastically” cut to support local distillers and build Australia’s international reputation.

Stefano Cantino, a director of the Maybe Group of top-rated bars, said that Australia’s soaring booze taxes are killing our local liquor industry.

The Maybe Group runs Maybe Sammy in The Rocks, which has won a slew of awards — including being named the most influential bar in the world in 2023 by Top 500 Bars list.

He said it “doesn’t make sense” that top quality local products are more expensive here than international spirits.

“I live in Alexandria, and there is a distillery 10 minutes from my house.

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Publican Ash Lyons at the Oxford Hotel in Bathurst NSW. Picture: Graham Schumann

“Their alcohol is more expensive than something that I can buy from England, which is shipped in a container and arrives here at $10 or $20 cheaper,” he said.

His comments come after The Daily Telegraph revealed an industry campaign to have twice-yearly tax hikes on alcohol frozen.

Why booze is set to get pricier

Distillers and brewers have gone to war with the Albanese government over taxes on booze which will increase again from next month.

Taxes on spirits and beer will increase from the start of February under a six-monthly tax hike tied to inflation, with the industry warning the ever increasing costs will destroy local liquor industries and turn a round of drinks into an unaffordable luxury.

With the price of a round of drinks set to increase from next month, there will be no escaping politics in pubs across regional NSW

Marginal seats will be the target of one campaign to end the “unbearable” tax on booze, with the liquor industry lobbying both major parties for change ahead of the election.

It comes amid a push from senior Coalition figures for Opposition Leader Peter Dutton to commit to cutting or freezing booze taxes as a cost of living relief measure.

Taxes on spirits are forecast to deliver a whopping $14 billion into federal coffers to 2027-28, even as increasing prices are forcing people to drink less.

Australia already has one of the highest tax rates on spirits, at $103.89 per litre of alcohol. Industry figures expect that to increase to as much as $105 per litre next month, with that to jump again in six months time.

“These twice yearly spirits tax increases are holding back Australia’s 700 distilleries, many of them small businesses” Australian Distillers Association CEO Paul McLeay said.

An excise on beer will raise also pour $11.5 billion into government coffers over the forward estimates.

“Every time you go to the bottle shop and you buy a slab, half of that goes straight to the federal government,” Brewers Association of Australia CEO John Preston said.

Bundaberg Rum will Friday launch a marginal seat blitz in NSW against the Albanese government’s “unbearable” tax on booze, calling for the twice-yearly tax hikes on spirits to be frozen.

Bundaberg Rum's campaign collateral they are using to counter the increases in government taxes on spirits. Picture: Supplied.

“At the moment, on roughly a $61 one-litre bottle of Bundaberg rum, about $38 is tax,” Bundaberg Distilling Company chair Amanda Lampe told The Daily Telegraph.

“Bundy drinkers and spirit drinkers in Australia are paying seven times more in tax than in than in the United States,” Ms Lampe said.

Australian Hotels Association NSW CEO John Whelan backed calls for a sector-wide indexation freeze, so that enjoying a drink with friends does not become a “luxury”.

“This is a hidden tax which increases the cost of a drink every February & August,” he said.

Nationals Leader David Littleproud last year led the charge on calling for a freeze to alcohol excises.

“We want to reduce as many taxes as we possibly can, when we can afford it, and the alcohol excise sits within that remit that the Coalition will consider,” he told the Telegraph.

In a statement, Opposition Treasury spokesman Angus Taylor said: “The starting point to reducing the pressure of indexation is to get inflation down”.

“The Coalition will release its full tax policies ahead of the next election.”

Publican Ash Lyons, the licensee for Bathurst’s Oxford Hotel, said the tax increases are slowly strangling regional venues.

“It’s demolishing an industry, it’s killing it off,” he said.

Mr Lyons said he will absorb the tax increase, because if he hiked prices he would lose business.

“I’d rather have less profitability of something than a higher profitability of nothing.”

In a statement, a spokesman for Treasurer Jim Chalmers said the increase was the “usual, legislated, automatic indexation change that happens twice a year under governments of both persuasions and it’s not a new decision of this government”.

Bondi local Kirsty Jones, 39 and Sylvia Purvis, 65, were able to squeeze in some drinks ahead of next month’s rises, as they enjoyed some time together at The Rocks in Sydney.

Kirsty Jones (right) from Bondi and her Aunt, Sylvia Purvis, on holiday from Newcastle UK, pictured at The Fortune of War Pub in The Rocks. Picture: by Julian Andrews

Ms Jones said she has become “more aware” and “conscious” of her spending habits as prices continue to soar, making a regular night out difficult for the average Sydneysider.

Currently visiting her niece from overseas, Mrs Purvis has been surprised by the steep price of alcohol in Australia, saying it “has become incredibly expensive.”

“Obviously the prices have had quite an effect on my holiday,” said Mrs Purvis.