Spirits tax hike leaves Gold Coast distilleries frustrated, predicting alcohol prices will soar

Frustrated Gold Coast distilleries have revealed the reason why standard drink prices are set to soar across the city.

GOLD Coast distillers frustrated by tax hikes are tipping standard drink prices to soar from $12 to $18 by 2024, permanently harming the city’s night-life and their businesses.

Boutique booze producers are speaking out against what they are call “unfair” Federal tax rules after the latest increases pushed up excise tax.

Tumbulgum’s Husk Distillers has joined a campaign against the “spirits super tax”, which they say increased their excise tax to $26.16 per bottle, up 31 cents, a week ago.

Excise is a commodity-based tax on alcohol, tobacco and fuel – the manufacturer is expected to recover the loss by raising prices. Australia’s spirit tax is 70 per cent higher than New Zealand’s and increases twice a year, making it one of the world’s highest.

Paul Messenger has spoken out against the tax. Picture: Lyndon Mechielsen/The Australian

The tax rates for spirits increased from $85.36 to $85.87 per litre of alcohol (LAL) in August last year, and has increased from $66.67 LAL since mid-2008.

Husk’s founder Paul Messenger said distilleries were “hamstrung” by the system: “Alcohol is alcohol, whether it’s beer, wine or spirits.

“The standard drink in a bottle of Ink Gin will cost us and our customers about a $1 per standard drink in excise.

“Whereas if you’re buying cheaper wine, you’re paying less than 10 cents (in excise).

“People just don’t understand why it’s so unfair.”

Granddad Jacks Gin Distillery co-owner and Australian Distillers Association board member David Ridden said the Gold Coast would feel the impact in a few years.

“The Gold Coast is a tourism-focused community, a lot of people will go out three or four times a week,” he said.

“We’re going to see a massive shift in that respect as people start to drink at home because they can’t afford to drink out.

“It’s not viable for a distillery like (Granddad Jack’s) to sell to bars, restaurants because we just can’t compete.

Granddad Jack's Distillery co-owner David Ridden has also tipped prices to soar. Picture: Glenn Hampson

“If you’re paying $12 (for a drink) by the end of 2024, they’ll have to charge you $18 for the same drink to make the same (profit), if nothing else in their business goes up.”

He added smaller distilleries would have to turn towards international markets to survive: “If we don’t focus on the export market we won’t survive. When we export we don’t have to pay excise tax, so we’re really competitive.”

Treasurer Josh Frydenburg: “The Government considers Australia’s current alcohol taxation settings are appropriate and has no plans to make any changes.”

He added his government “supported Australia’s growing distilling industry”.

Mr Frydenburg said the Government extended the excise refund scheme to distillers from July 1, 2017.

“Under the scheme eligible manufacturers of alcoholic beverages can claim a refund of 60 per cent of the excise duty paid on the products.”

HIKES FOR HUSK

*$26.16 excise tax per bottle of Ink Gin, plus $7.45 GST

*$33.61 in tax total per bottle

*$1.09 excise tax per standard drink of Ink Gin

*$0.05 excise tax per standard drink of Golden Oak Fruity Cask wine

*20 excise tax rises in 10 years