Federal government announces $250k tax breaks for liquor producers

Small brewers and distillers will get a tax cut worth up to $250,000 a year in a $255 million Federal Budget measure aimed at boosting the post-COVID economy.

Here’s cheers to an ­alcohol-led recovery as whisky-makers and small brewers are set to reap the benefits of Budget cuts.

The federal government will give liquor producers a tax cut worth up to $250,000 a year that should not only create more jobs in the beleaguered industry, it could also lead to a small price cut for some favoured tipples.

Hollie Keys and Ben Magree enjoy a beer at Philter Brewery in Marrickville. Picture: Sam Ruttyn

The changes, which come into effect from July 1, will more than triple the volume of liquor that producers can sell before they need to pay ­excise tax.

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

But, under the plan to be unveiled on Budget day this month, the government will completely 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 microbreweries and small distillers, whose numbers have swollen in recent years.

The changes will amount to a tax cut to the industry worth $255 million a year.

Treasurer Josh Frydenberg will give liquor producers a tax cut worth up to $250,000 a year. Picture: James Ross/AAP

Treasurer Josh Frydenberg said the change was great news for smaller brewers and distillers right around the country.

“Australian brewers and distillers are world leaders in their field and this measure is going to assist them to continue to invest, grow and create jobs,” he said.

The change has been greeted with open arms by producers, with Stuart Gregor, who co-founded Four Pillars gin and who is now president of the Australian Distillers Association, describing it as a “great day” for distillers.

“It’s also a great day for drinkers in Australia because it will give the distillers of Australia a better chance to get their drinks into the bars, clubs, hotels of Australia,” he said.

“If they’re particularly small they might be able shave a couple of bucks off the price (and) it probably means they won’t have to raise their prices.”

Four Pillars co-founder Stuart Gregor.

Moon Dog Brewery’s Karl van Buuren.

The move has also been welcomed by beer makers.

Brewers Association CEO John Preston said Australia’s beer tax was the fourth-highest in the developed world and the move was particularly welcome as the ­industry rebuilt.

“There’s nothing better than Australian brewed beer and that’s why we welcome this decision which will particularly help smaller brewers,” he said.

“COVID-19 has hit our sector hard, with 44 million schooners destroyed last year due to lockdowns, $1 billion lost in beer sales and many venues still operating under restrictions.”

Karl van Buuren, co-founder Moon Dog Craft Brewery, said the tax cut would be a “game changer” for small brewers.

“I think any kind of decision that’s going to help the craft beer industry is to be welcomed,” he said.

Independent Brewers Association Chairman and founder of Sydney-based Wayward Brewing Co Peter Philip said 42c in every dollar independent brewers earned ended up going to the government in federal tax.

Originally published as Federal government announces $250k tax breaks for liquor producers