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Alcohol prices set to jump with government cost increases

Victorians are being warned to brace for one of the biggest alcohol price rises in years as the cash-for-container scheme fee increase and the higher alcohol excise hit at the same time.

Chair of the Independent Brewers Association Callum Reeves says the price rise will force some brewers to close. Picture: Tony Gough
Chair of the Independent Brewers Association Callum Reeves says the price rise will force some brewers to close. Picture: Tony Gough

The cost of alcohol in Victoria will soon increase as brewers and distillers are hit with a double whammy of government cost increases which will push up the price of a slab of beer and a pint at the pub.

Victorians are being warned to brace for one of the biggest alcohol price hikes in years with the Victorian government’s cash-for-container scheme fee increase and the federal government’s higher alcohol excise hitting at the same time in February.

The industry has warned consumers will feel the financial pain and likely reduce spending on beer and spirits.

Mr Reeves, who is co-founder of KAIJU! Beer, says the surge in price is really hard on brewers. Picture: Tony Gough
Mr Reeves, who is co-founder of KAIJU! Beer, says the surge in price is really hard on brewers. Picture: Tony Gough

Callum Reeves, chair of the Independent Brewers Association and co-founder of KAIJU! Beer, said the two price hikes combined would be the final straw for some Victorian brewers.

“A lot of brewers don’t make a profit, so they will have to put their prices up or lose money, but that also means consumers stop buying, so it’s really hard on us,” he said.

“There are a number of brewers, and they are right on the edge, and these will likely be the last hits they can take.”

The operating costs of the Victorian container scheme will increase by 30 per cent, raising the cost by an average of 3.53 cents per item. Industry figures estimate the real increase will be close to $2 a slab.

Australians 'paying too much' for beer because of 'duopoly'
The cost of a pint at the pub will be pushed to about $15.
The cost of a pint at the pub will be pushed to about $15.

Meanwhile, the federal government will apply its biannual increase in the alcohol excise, expected to be between 2 and 3 per cent. This will add about $1 to a slab and push the cost of a pub pint to about $15.

Brewers Association of Australia chief executive John Preston said the alcohol tax was coming at a time when pubs and drink sellers were already “getting smashed” by high prices across the board.

“The increase is another kick in the teeth for anyone that enjoys a beer,” he said, adding it was now normal for a pint to cost more than $15.

“It’s becoming hard for people to justify going out, and that’s bad for our hospitality industry and our workers.”

Mr Preston said the UK government announced in October it would cut the excise on draught beer by 1.7 per cent and urged the Albanese government to “follow suit”.

Brewers Association of Australia chief executive John Preston says the UK government announced in October it will cut the excise on draught beer by 1.7 per cent. Picture: AFP
Brewers Association of Australia chief executive John Preston says the UK government announced in October it will cut the excise on draught beer by 1.7 per cent. Picture: AFP

Spirits & Cocktails Australia chief executive Greg Holland said the tax on spirits had increased by almost 20 per cent in the past four years, exacerbating cost pressures felt by businesses across the sector.

“The federal government must act now to freeze spirits excise to release this handbrake on the growth of spirits manufacturing, a burgeoning industry supporting more than 100,000 jobs across Australia, many of which are in regional areas,” he said.

Brewers also said different states had differing cash-for-container schemes, which was confusing and costly, especially for Victoria, which had one of the more expensive operations.

A state government spokesperson said: “Drink prices are set by the beverage industry. The increase of just over 3c per can or bottle will ensure the CDS can keep up with the growing demand from Victorians to recycle their drink containers and get cash back.”

A federal government spokeswoman said: “Alcohol excise indexation is a longstanding feature of the tax system under governments of both persuasions that happens automatically twice a year under the law.”

Deputy Liberal leader Sussan Ley on Friday left the door open to the Coalition reviewing the beer excise, saying they were “looking at everything when it comes to tax”.

Originally published as Alcohol prices set to jump with government cost increases

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Original URL: https://www.thechronicle.com.au/news/victoria/alcohol-prices-set-to-jump-with-government-cost-increases/news-story/b2e211acd1d0e2661ce232c796ff90ff