Labor MPs take craft beer tax fight to Federal Parliament

Labor MPs Joel Fitzgibbon and Anthony Albanese have followed through on their promise to support Australian craft brewers and lodged a private members’ motion this week in Federal Parliament calling on the government to do more to assist the industry.

“The current tax arrangements are a hangover from John Howard’s scramble to make sure beer didn’t get put under the GST. They’re unfair, and they’re skewed against the craft beer brewers,” Fitzgibbon, Member for the Hunter, said.

Asked if he supports a flat excise on beer, Fitzgibbon told The Newcastle Herald his motion with Albanese was to “initiate processes” by which the policy settings around craft brewing can be examined.

MPs met with craft bewers

Fitzgibbon and Albanese met with craft brewers last week to discuss their grievances.

Currently, brewers are taxed at about $34 a litre if their full-strength beer is sold in a 50 litre keg, but the identical beer in smaller packaging, such as bottles or more compact kegs, attracts an excise of $49 per litre.

"It's just crazy, it's outdated, it's from another era," Willie the Boatman brewery co-owner Pat McInerney told ABC News. "It should be just one levy across the whole spectrum of beer."

Craft brewers want to sell their product in smaller kegs to keep the beer fresher and allow bars to rotate their selection, but the tax discrepancy makes it uneconomical for them. 

“For slower venues or bigger alcohol beers, the cost becomes prohibitive,” Lachlan Macbean, founder of Newcastle’s Grainfed Brewing Company, told The Newcastle Herald. “Everything has to be in 50-litre kegs.”

Macbean added that excise accounts for about a third of his production costs.

Brewers call for tax rebate increase

Brewers are also campaigning for their annual tax rebate brought closer to the winemakers' rebate.

"That would not only grow the industry, it would grow every brewery, McInerney said. "It wouldn't go into our pockets, it'd go back into the business; on buying new stainless steel and on training new staff."

Macbean agreed: “If they brought up the brewers’ rebate to the same as the winemakers’, I could potentially build my own brewery and employ people. They’re stifling economic and tourism opportunity.” 

Wine producers can claim up to $500,000 annually under the Wine Equalisation Tax (WET) rebate scheme, while beer producers can only claim back $30,000 in excise a year.

Prior to the Federal election last year, The Craft Beer Industry Association noted: "The total increased cost of lifting the rebate cap to match that of wineries would be in the order of $15 million. This would benefit more than 150 of Australia’s craft breweries who would be able to reinvest these funds back into their business through equipment purchases, innovation and market development with the resultant creation of jobs.

"The budget papers highlighted that the proposed change to the WET rebate will save $300 million over 4 years. It is about time that a small fraction of those savings were used to afford small brewers the same opportunity for excise relief – and the consequent ability to invest in growth and in their regional areas – as our winery counterparts."

Pictured: Fitzgibbon and Albanese meet with craft brewers in Sydney