Hospitality peak body warns hidden ‘beer tax’ will cripple pub staff and hospitality workers

An influential hospitality lobby has feared the much maligned tax will make a schooner or pub G&T even more expensive, while crippling small country pubs.

An influential lobby group representing more than 50,000 pubs, hotels and hospitality businesses has called on the federal government to stop a “killer” alcohol tax which it says is increasing the cost of a beer or gin and tonic.

The biannual excise duty, which is set to add $800m to state coffers this financial year, has been in place has been in place since 1989 and was last upped on February 4 and will be raised again on August 5.

The tax is slapped on distillers and brewers, and is calculated depending on the alcohol percentage and product volume, while wine makers and cider brewers are subjected to a different tax.

Ongoing increases has meant Australia’s excise of spirits is the third highest out of all OECD countries, behind Iceland and Norway.

AHA chief Stephen Ferguson said the cumulative tax was being passed on to struggling venue operators and consumers. Picture: Glenn Campbell/ NewsWire

Ahead of the scheduled increase, Australian Hotels Association National chief executive Stephen Ferguson has warned increasing the “hidden tax” amid a cost-of-living crisis will hurt hospitality workers and make going to the pub unaffordable.

“We are calling on the government, opposition and cross bench to support reducing the excise on all beer and spirits poured into a glass and served to a customer in a pub,” he said.

“Its’s not the politicians who cop the grief from customers every time the business has to pass this hidden tax on – it’s the worker or owner behind the bar who cops it.

Mr Ferguson described it not only as a “hidden tax on socialising,” but also said the cumulative increase every six months was impacting businesses.

“This hidden tax – which has gone up every six months for the last 35 years – will hit pub-goers in the hip pocket at a time they can least afford it,” he said.

“For example, this hidden tax collected on beer in a small country pub selling 15 kegs is more than $1000 per week – that amount can make a huge difference to a small business in the bush.”

However any potential cuts or pauses to the excise have been criticised by health and welfare bodies.

In February 2022, more than 80 health and community groups including the Foundation for Alcohol Research & Education, the Salvation Army and Cancer Council urged law makers to abandon plans to reduce the excise, linking an increase in alcohol-related harm amid booming sales during the pandemic.

“Any reductions in alcohol excise rates would result in alcohol being cheaper relative to the cost-of-living, and result in increases in alcohol harm,” the letter read.

“A reduction to the usual level of taxation revenue would also lower government resources that are desperately needed to manage this pandemic.”