Geelong’s lucrative distilling industry at risk due to federal government’s soaring spirit tax

Geelong’s lucrative distilling industry, which pumps millions of dollars into the region each year, could be at risk due to the government’s soaring spirit tax.

Lorelle Warren is the co-owner and co-founder of Bellarine Distillery and The Whiskery. Picture: Alison Wynd

   

Geelong’s lucrative distilling industry could be at risk due to the government’s soaring spirit tax.

Australia has the third highest spirit tax in the world, behind Iceland and Norway, which is more than double the excise on beer.

The spirit tax is increased every six months according to the consumer price index (CPI).

Bellarine Distillery and The Whiskery co-owner Lorelle Warren said there was no reason for the spirit tax to so “extraordinarily” high.

“We currently pay $101.85 per one litre of pure alcohol which is very high,” she said.

The business pays 42 per cent in tax per 700ml bottle of its Teddy and the Fox gin.

It’s estimated four of the major gin distilleries across Geelong, the Bellarine and Surf Coast pump about $10m a year into the region’s economy.

Ms Warren’s business attracted 30,000 visitors in the past calendar year and employs 36 people, including 13 full-time positions.

In a recent submission to a federal Parliamentary inquiry into food and beverage manufacturing in Australia, Ms Warren wrote the current excise posed a “significant barrier” to the growth and sustainability of the distilling industry.

She said her business may consider closing for periods during the year to help keep costs down.

“It will mean less employment and less opportunities for local producers,” Ms Warren said.

“We serve locals wines at our venue to they won’t get business because we won’t be open.

“It will have a massive roll on effect.”

Australian Distillers Association chief executive Paul McLeay said the tax on spirits was unfair and unsustainable, putting a handbrake on the growth of a promising industry.

“It’s impossible for local distillers to consider employing more staff, opening a distillery door or accessing new export markets with this out-of-control tax,” he said.

“If the government is serious about growing domestic manufacturing jobs, particularly in the regions, they can’t have it both ways.”

Ms Warren urged the federal government to launch a review of the excise scheme for the spirit industry and create an equal tax for all alcohol.

“Alcohol is alcohol, no matter what form it is presented as,” she said.

She also urged the federal government replicate its cellar door grants to support the spirit industry.

The Victorian government provided $10m in distillery door funding in October 2022 to help businesses grow, boost tourism and increase employment opportunities.

The federal inquiry is looking into opportunities to grow the Australia’s food and beverage manufacturing industry as well as addressing any barriers businesses are facing.

The content summaries were created with the assistance of AI technology, then edited and approved for publication by an editor.

Originally published as Geelong’s lucrative distilling industry at risk due to federal government’s soaring spirit tax