Australia’s beer and spirits industries face yet another setback as the bi-annual Consumer Price Index (CPI) increase triggers a growth-inhibiting tax hike. Despite repeated pleas from businesses, the Federal Government remains unresponsive to calls for support.
The excise duty rates for alcohol are indexed twice a year based on the CPI’s upward movement. Following the Australian Bureau of Statistics’ publication of the CPI on January 31, the indexation day, just five days later, marked the implementation of the latest tax increase.
For beer, specifically those with alcohol content exceeding three percent in an individual container less than eight liters, the tax now exceeds $60, precisely at $60.12. Pub beer tax for beers over 3.5 percent effectively stands at $42.37.
Australia’s spirits industry also faces significant hits, with taxes surpassing $100 per liter of alcohol for the second time since August last year, now reaching $101.85. Spirits & Cocktails Australia’s CEO, Greg Holland, emphasizes that the latest increase marks a 16 percent surge in spirits tax over the past three inflationary years.
Holland asserts, “This tax is clearly unsustainable for spirits manufacturers, their trade customers, and consumers already grappling with the cost of living. We call on the Government once again to freeze this tax at its current rate for two years, providing relief to our industry and aiding the government’s mission to control inflation.”
Paul McLeay, CEO of the Australian Distillers Association, echoes this sentiment, emphasizing the urgent need for tax reform in the country’s craft spirits industry. McLeay urges the Government to freeze spirits tax at the current rate for two years to facilitate collaborative efforts in developing sustainable policy settings for the industry.
John Preston, CEO of the Brewers Association, voices concerns about the impact on Australian consumers, stating, “This twice-yearly increase is hurting hard-working Australians, with our beer tax now the third highest in the world. It’s just more bad news.”
Despite persistent campaigns from the brewing and spirits industries, the government continues to overlook the financial strain on the Australian public. Prime Minister Anthony Albanese, in response to questioning during 17 press conferences and interviews, acknowledged the issue only once. When pressed on the possibility of pausing excise, the Prime Minister expressed that it was not under consideration at the moment but acknowledged the need to explore ways to provide cost-of-living support while managing inflation.
