Labor promises two-year freeze on alcohol excise for draught beer, spirits, tinnies and bottles not affected

Labor has promised a two-year pause on a much-hated ‘beer tax’, however it won’t be a cost-of-living win for all drinkers.

Anthony Albanese has promised a two-year freeze on the much hated alcohol tax for draught beer, however not all drinkers will benefit from the “modest” cost-of-living win.

From August 2025, the biannual alcohol excise, which is charged to brewers and distillers will be paused on draught beer, beer served from a keg or cask, meaning it only has the potential to bring down the cost of a schooner or pint poured in a pub, bar or restaurant, with distillers and brewers who want to sell bottled a tinned beer missing out.

The excise was increased for the for the 84th time on February 4 this year, where it was hiked by a factor of 1.004.

While the excise on beer depends on the alcohol concentration and the volume of the finished product, the excise of spirits increased from $103.89 per pure litre of alcohol to $104.31.

However the Prime Minister said the cost-of-living measure will support brewers, regional tourism and venues, which have been hit hard by rising inflation, and patrons affected by cost-of-living stresses.

“My government is building Australia’s future and to do that we need to support our small and medium local businesses to thrive,” Mr Albanese said.

“Freezing the excise on draught beer is a common sense measure that is good for beer drinkers, good for brewers and good for pubs.”

Labor will freeze the alcohol excise on draught beer for two years from August 2025. Picture: NewsWire/ John Gass

Jim Chalmers said that while the excise freeze will be a “modest change,” it’ll “help take a little bit of the pressure off beer drinkers, brewers and bars”.

Although hospitality and clubs groups will back Friday’s announcement, it’ll likely draw the ire of distillers and independent brewers.

Arguing against the February hike, Australian Distillers Association chief executive Paul McLeay said the growing tax was flattening what could be a growing export stream.

“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.

“Not only will this deliver on the government’s trade diversification goals, but it will also support the economic priorities of growing domestic manufacturing and increasing employment opportunities, particularly in the regions.”

In late January, on the eve of the February excise hike, Mr Chalmers wrote to the consumer watchdog urging them to ensure drinkers won’t get “ripped off or lied to” about the small excise uptick.

He urged Australian Competition and Consumer Commission chair Gina Cass-Gottlieb to monitor prices to ensure retailers and venues weren’t blaming the excise for increased prices, stating the changes would have a 1 to 2 cent increase on most beers, with a 24 pack of 375ml bottles of mid-strength beer incurring an increase of about 5 cents.

Jim Chalmers said the last round of excise increases would have resulted in a 5 cent increase on a 24 pack of 375ml bottles of mid-strength beer. Picture: NewsWire / John Gass

“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,” Mr Chalmers said at the time.

“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.”

In recent days Labor has also boosted the excise remission cap for eligible brewers and distillers to $400,000, which means they get a full refund on excises paid up to that amount.

From July 1 of next year, the Wine Equalisation Tax producer rebate cap will also be boosted to $400,000, from $350,000.

The fee is calculated at 29 per cent of the wholesale value of wine and is payable by manufacturers, wholesalers, and importers.