Australians may soon find the cost of enjoying a pint at their local pub crossing the $15 mark, as a significant tax hike on alcohol, set to take effect on February 5th, threatens to push prices up by around 90 cents per pint.
This latest increase, driven by a 2% rise in the excise tax on alcohol, adds another layer to the ongoing cost of living pressures faced by consumers.
John Preston, CEO of the Brewers Association of Australia, highlighted the country’s position as having the third-highest beer tax globally, surpassed only by Norway and Finland.
The excise tax, which varies based on the alcohol content of beverages, is adjusted biannually in alignment with inflation rates. Following a 4.1% inflation increase for the quarter ending December 31, Australians have witnessed nearly a 15% surge in excise tax since the last federal election in May 2022.
This adjustment is part of a system that has seen the price of beer, wine, and spirits climb steadily, with the upcoming hike expected to bring the tax per litre of pure alcohol to $101.85, contributing to an anticipated $7.86 billion in government revenue this fiscal year. The brewing and distilling sectors are urging the government to consider tax cuts to mitigate these escalating costs being passed onto consumers.
Amidst this backdrop, Bundaberg Rum has initiated a campaign to halt Australia’s spiraling spirits tax, advocating for a pause and review of the current tax system, which poses a significant challenge to businesses and exacerbates cost of living stresses.
Australia’s taxing approach to alcohol, particularly spirits, starkly contrasts with other countries, pushing some businesses to contemplate relocating overseas to evade the financial strain. The comparison of Bundaberg Rum prices between Los Angeles and its Australian production site underscores the disproportionate impact of domestic taxes.
This situation echoes broader global trends, with countries like Canada also imposing higher taxes on alcoholic beverages, sparking concern among smaller producers about the sustainability of their operations in such a taxing environment.
The Brewers Association’s call for a reduction in the beer tax rate and an end to biannual increases underscores the growing unease within the industry over the financial viability of Australia’s pubs, clubs, and the broader hospitality sector.
With beer taxes reaching record highs and other cost pressures mounting, the quintessential Australian experience of enjoying a pint with friends at the local is becoming an increasingly costly affair, prompting a reevaluation of tax policies to safeguard the nation’s brewing heritage and hospitality industry.
- Beer (Alcohol Volume Not Exceeding 3%)
- Small containers: 1.79% increase
- Large containers & kegs: 1.78% increase
- Beer (Alcohol Volume Exceeding 3% But Not Exceeding 3.5%)
- Small containers: 1.79% increase
- Large containers & kegs: 1.79% increase
- Beer (Alcohol Volume Exceeding 3.5%)
- Small containers: 1.79% increase
- Large containers & kegs: 1.80% increase
- Non-Commercial Beer Production
- Alcohol volume not exceeding 3%: 1.68% increase
- Alcohol volume over 3%: 1.70% increase
- Other Excisable Beverages (Not Exceeding 10% Alcohol Volume)
- Increase: 1.80%
- Spirits and Other Excisable Beverages (Exceeding 10% Alcohol Volume)
- Including brandy and spirits not elsewhere included: 1.80% increase
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