Tax changes a win-win for burgeoning Tasmanian spirits industry and consumers

Tasmania’s distillers and microbreweries are rejoicing after the announcement of tax cuts for the growing industry, which will result in more jobs, more products and cheaper drinks.

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THE state’s spirits industry will be able to employ more people, produce more “iconic” products and eventually lower their prices after tax cuts come into effect later in the year, says Tasmania’s distilling pioneer Bill Lark.

A joint pre-budget submission by the Australian Distillers Association and Spirits and Cocktails Australia called for the excise refund limit to be lifted to the exact amount announced by Treasurer Josh Frydenberg on Saturday.

Brewers and distillers currently receive a rebate from the government of 60 per cent of the money owed in excise when their product leaves their warehouse, up to an annual cap of $100,000.

But under the plan to be unveiled in this month’s federal budget, the Commonwealth will remit all the duty payable by brewers and distillers on the first $350,000.

Although the change will apply to all producers, it will overwhelmingly benefit the microbreweries and small distillers whose numbers in Tasmania have swollen in recent years.

Bill Lark and distiller Silvia Segato toast the coming tax changes that will benefit the state’s distilleries. Picture: EDDIE SAFARIK

“It feels like Christmas Day – I phoned a few distillers this morning and they said this means they’ll be able to put a part-time worker on full time – it will mean a terrific expansion of the industry at a time when people have been struggling to keep their businesses together through a difficult year,” Mr Lark said.

“This is an industry that has the ability to employ a lot of Tasmanians and produce an iconic product for the state so we’ve had support from all quarters so that’s been very satisfying and humbling.”

Mr Lark previously said distillers were being “crippled” by the country’s high tax rates, but once they get on a better financial footing, that should trickle down to the consumer.

“In time, prices will come into a category that’s competitive and attractive to the consumer,” he said.

Lark Distillery is now Australia's first carbon neutral distillery. Bill Lark and distiller Silvia Segato outside the Cambridge distillery. Picture: EDDIE SAFARIK

Independent Member for Clark, Andrew Wilkie, who was active in calling for the changes from the federal government, said it would make the Australian industry more competitive globally.

“This much-needed tax relief will turbocharge Tassie’s award-winning distilleries, which will one day rival winemaking in this state, and create local jobs,” he said.

As part of the federal government’s climate active program, Lark Distillery has also recently been certified carbon neutral.

Lark Distilling Co managing director Geoff Bainbridge said the business had achieved the status largely by making changes to its packaging and consumables and moving to green gas.

“It was a series of small initiatives and a mindset change for us – the achievement of this milestone truly represents the best of Lark in terms of our pioneering spirit, the brand values and community contribution,” he said.