Australian industry bosses call for change ahead of slated alcohol excise increase on Feb 1

A hidden tax on a beloved Aussie staple will be upped for the 84th time since it was introduced – prompting industry groups to call for change.

Australia’s spirits industry has called on the government to remove an outdated increases to an alcohol tax slapped on brewers and distillers, with concerns the “dripping tap” is punishing both producers and drinkers in a cost-of-living crisis.

From Monday, the alcohol excise – which is upped every six months – will increase for the 84th time since its introduction in 1983, and will be hiked by a factor of 1.004.

While the tax applied to beer depends on the alcohol strength of the brew, spirits will be taxed at $104.31 per pure litre of alcohol, an increase from $103.89.

However, industry bodies argue the successive increases punish both consumers and distillers.

“Beer and spirits excise is a dripping tap which delivers $6.2bn of drinkers’ money to Canberra already – and is budgeted to go up another $800m by 2027,” Australian Hotels Association chief executive Stephen Ferguson said.

“That’s money out of people’s pockets who can’t afford it. Everyone knows a dripping tap should be turned off.

“That’s what we want to see, a fair go for the men and women who enjoy a beer or gin and tonic at their local pub – not a hidden tax designed to increase by small amounts that goes up twice a year.

“These are the places where jobs are actually created – and they are the heart of their communities.”

The alcohol excise will increase on February 3. Picture: NewsWire / John Gass

Spirits & Cocktails Australia chief executive Greg Holland said the tax was now 20 per cent high than pre-pandemic prices, before Australia was gripped by surging inflation.

“The latest tax increase, which takes Australia’s spirits excise to $104.31 per litre of alcohol, will make it more expensive for consumers, more expensive for producers, and less competitive for spirits exporters,” he said.

Seizing on Labor’s election campaign slogan of “building Australia’s future,” Australian Distillers Association chief executive Paul McLeay said the excise was prohibiting growth in the sector’s export capabilities.

He said freezing the excise will boost the government’s trade diversification goals, and help distillers grow their domestic manufacturing ability, and also boost jobs.

“There are 700 spirits manufacturers in Australia, half of which are based in regional areas,” he said.

“With the right policy settings, the Australian spirits industry can deliver $1bn in exports in the next decade.”

Industry groups are calling for a freeze on the excise, which is increased every six months. Picture: NewsWire/ John Gass

While the National Party has previously called for a two-year base on the beer and spirit excise, Jim Chalmers has hosed down concerns, saying the impact of the excise increase equates to “less than one cent per schooner”.

The Treasurer has also written to the Australian Competition and Consumer Commission (ACCC) chair Gina Cass-Gottleib calling on the watchdog to monitor retails over the month of February to ensure they don’t use the excise mark-up to inflate prices.

“We are going in to bat for beer drinkers by making sure they’re not ripped off or lied to about this very small change,” he said.

“We’ve written to the competition watchdog to make sure pubs aren’t doing the wrong thing by their customers by blaming the government for any much bigger increases.

“Most pubs who do the right thing won’t have anything to worry about.”

Originally published as Australian industry bosses call for change ahead of slated alcohol excise increase on Feb 1