Beer Prices To Increase After Aussie Brewers Cop A Tax Hike

Starting from this week, you can expect to pay more for tap beer at pubs all across Australia thanks to a new government tax increase – potentially the biggest of its kind in more than a decade for ordinary punters, according to Brewers Association of Australia CEO John Preston.

As of February 1st, the Australian Tax Office (ATO) has decided to bump up the excise duty rate per litre of alcohol by a factor of 1.021 in order to counter inflation. Effectively, this means the amount of tax both commercial premises and brewers pay per litre will rise depending on which product they brew, with the added costs passed onto consumers.

A keg of beer between eight litres and 48 litres where the alcohol volume does not exceed 3% will now incur an excise duty of $9.20 per litre of alcohol. Previously, the same excise duty was just $9.01. For kegs over 48 litres where the alcohol volume is between 3% and 3.5% – i.e. commercial kegs, given how many are approximately 50 litres – the excise duty will climb from $28.23 per litre of alcohol to $28.82.

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Aussies currently shell out $2.26 in tax per litre of grog. And while that might seem like a negligible sum at first, as pointed out by Perth Now, that accounts for almost half of what you’re paying in a typical carton of full-strength beer. By sheer comparison, this is 17 times more than the $0.13 you’d be paying in Germany; hence why Australia retains the fourth-highest beer tax in the world behind Norway, Finland, and Japan.

According to the Brewers Association of Australia, our government nets approximately $3.5 billion in beer tax a year: $2 billion from excise, $201 million in GST on the excise, with another $1.3 billion in GST at the retail end of the beast. CEO John Preston notes a 50% cut in draught beer tax would only reduce the federal government’s revenue by a measly $150 million a year. Or around 5% of total beer taxes collected. Yet still, here we are…

“Twice a year for 35 years pubs and drinkers have copped a tax hike on draught beer,” says Bernie Hogan, CEO of Queensland Hotels Association.

“This year – after our members have done the right thing throughout the pandemic and at a time when jobs and businesses hang in the balance – we ask that pubs and drinkers get a break.”

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“We’re not asking for a handout,” says Tony Fyfe, Co-Owner of Hemmingway’s Brewery in Cairns.

“What we’re asking for is a reduction of tax to help the hospitality businesses get through this period.”

“Over the last two years, we’ve done the right thing, followed the government mandates, closed down when we had to and operated under really difficult restrictions.”

“This is just another kick in the guts… it’s really, really tough to work with.”

“The government should be doing all it can to encourage people to safely visit their local pubs and clubs,” says John Dabner, General Manager of the Tall Timbers hotel in Tasmania.

“Not put another roadblock in the way by increasing beer prices.”

Bob Hawke would be rolling in his grave. If anyone needs me, I’ll be planning a revolution in my basement.