Australian Distillers Assoc. CEO says ‘2024 was a landmark year in prosecuting our case’

Founded in 2004, the Australian Distillers Association is the peak industry body for Australian craft distillers. It now represents the more than 600 distilleries found nationwide, up from just 28 distilleries 10 years ago in 2014.

Earlier this year, Drinks Trade spoke to Paul McLeay shortly after the second biannual spirits tax hike. During this two-part interview, McLeay outlined what the increase means for Australian distillers, and whether Australia could become a global player under different policy.

Here, Paul McLeay summarises a busy year at the Australian Distillers Association:

“Australian distillers have long been telling the Federal Government that the policy settings for our industry are out of date. I believe that 2024 was a landmark year in prosecuting our case for urgent reforms.

We’ve long known our products are world class, and the trophy cabinet is overflowing once again after another incredible showing on the award circuit.

And we know, therefore, that a growing number of spirits enthusiasts around the world are eager to try the unique Australian spirits that they have been hearing so much about.

This presents a major economic opportunity for Australia, which accords with the Government’s current goals and priorities. Our members are mostly small businesses, they are growing manufacturing jobs and they are empowering regional communities. More than half our distilleries are in regional areas. We're creating export opportunities and we're generating tourism through our distillery doors.

We are also supporting more diverse career opportunities for young people, and we have higher proportions of females in our workforce than any other beverage alcohol category.

We all saw what happened with the wine industry a generation ago, when Federal Government intervention turned it into the $2 billion export industry it is today. So, together with Bundaberg Rum, we partnered with economics firm Mandala Partners to develop research demonstrating that Australian spirits could be a $1 billion export industry by 2035, if we can get the correct policy settings in place.

Our industry took this argument forward in the recent Parliamentary Inquiry Into Food and Beverage Manufacturing. It enabled us to benchmark spirits versus other food and beverage segments, demonstrating the unrivalled agricultural value-adding potential that spirits manufacturing presents.

For example, our vice president David Vitale shared how his business Starward Whisky converts $300 a tonne of Australian barley into $43,000 worth of award-winning Australian whisky. So, his manufacturing process is increasing the value of Australian grain almost 100-fold, ready to be sent offshore from Melbourne – a far superior outcome for the Australian economy than simply exporting the grain so that Scottish or Japanese distillers can process it at the other end. It’s an incredible story, and we would challenge any other industry to match this economic multiplier.

We are optimistic that the lure of a $1 billion export industry will prove compelling for Government to consider our modest and achievable policy asks.

With spirits excise now at an unsustainably high $103.89 per litre, we are calling for a freeze on six-monthly indexation to CPI. This would help provide the certainty and financial incentives for people to reinvest in their businesses, and encourage direct foreign investment and other forms of capital investment that are absolutely crucial for our industry to grow.

Further, we have called for the establishment of Spirits Australia, a body that would undertake tasks and functions similar to what Wine Australia does, such as marketing, promotion and the enforcement of labelling standards.

We look forward to continuing these conversations with Government in 2025, as the Australian Distillers Association celebrates 21 years of advocacy for its members.”

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This article was written by Paul McLeay for Drinks Guide 2025, which will be distributed nationwide soon. If you would like a copy and are not currently on the Drinks Trade/Guide magazine mailing list, get in touch with the team now.