Australia’s excise duty rates for alcohol will increase again on August 1, leaving the industry outraged as the tax is set to hit $100 per litre of alcohol.
Indexed twice a year, the excise is linked to the consumer price index (CPI), released by the Australia Bureau of Statistics yesterday, resulting in the unprecedented increase, reaching a threshold not expected until 2029.
Industry-wide outrage from spirits producers is being led by Paul McLeay, Chief Executive of the Australian Distillers Association and Greg Holland, Chief Executive of Spirits and Cocktails Australia.
“It’s outrageous to think that Australia’s spirits tax – which is already the third highest in the world – will exceed $100 per litre of alcohol next month,” said Holland. “A gin and tonic now has more than double the tax of a Great Northern. When will enough be enough?”
McLeay said the tax on spirits is unfair and unsustainable, making growth in a promising industry almost impossible.
“It’s impossible for local distillers to consider employing new staff, opening a distillery door or accessing new export markets with this out-of-control tax.
“If the government is serious about growing domestic manufacturing jobs, particularly in the regions, they can’t have it both ways,” he said.
Eddie Brook, Founder of Cape Byron Distillery, agrees. He said small distilleries could not realistically pass on the twice-annual increase to their customers.
“If we asked our loyal customers to pay an extra $2 or $3 every six months, we would start to look greedy in their eyes…what that means is, we’ve had to absorb a lot of those increases, which has made the running costs extremely tight,” said Brook.
Brook said the result is a reduced ability for his business to grow as the forecast excise increase will cost the company about $70,000 a year in lost profits.
“That’s the equivalent of a full-time staff member that we won’t be able to employ as a result,” he said.
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