Submissions put forth by Australian spirits manufacturers have dominated the Federal Government's recent Food and Beverage Manufacturing in Australia inquiry, which closed to submissions on Wednesday of last week. 

The inquiry, which was the first of its kind available to Australia’s liquor industry, received 105 submissions across food, wine, cider, beer, and spirits. The submissions will be reviewed by the House of Representatives Standing Committee on Industry, Science and Resources following a referral from the Minister for Industry and Science, Hon Ed Husic, on 18 March. 

The strong representation by the spirits industry is reflective of the current pressures being faced by the sector.

“While our colleagues in Australian wine reap the benefits of decades of support and investment, Australian spirits manufacturers stalk the corridors of key export markets alone,” said Paul McLeay, Chief Executive at the Australian Distillers Association.

“We look forward to making our case for the modest reforms that will unlock this growth, as the Inquiry continues over the coming months.”

The quantity of submissions is also reflective of the increased scale of Australia’s spirits industry, which now includes over 700 distilleries, more than 28 times the amount in 2014. The spirits industry currently contributes $15.5 billion in added value to the Australian economy and supports 100,000 jobs either directly or indirectly. 

Recent economic modelling commissioned by the Australian Distillers Association and Diageo Australia suggests that current Federal Government policy and regulatory barriers affecting spirits could be thwarting a potential $1 billion growth for Australian spirits exports.

Greg Holland, Chief Executive of Spirits & Cocktail Australia, says that Federal Government intervention is crucial.

“When Prime Minister Anthony Albanese announced the Future Made in Australia Act last month, he acknowledged that Australia is in a ‘race’ to attract the investment necessary to build a domestic manufacturing sector,” he said 

“In the case of spirits manufacturing, the simple fact is that the race to win global market share is already well underway, and Australia lags its global counterparts in joining the contest.

“Foreign direct investment could fulfil this requirement, but as it currently stands, global spirits companies are understandably directing their capital to other markets where the policy settings are more favourable.”

In its inquiry submission, the Australian Distillers Association’s featured the case study of Japan, which has increased its spirits exports sixfold over the last decade to more than $900 million in 2023, as an example of good government policy. 

The submission, which can be downloaded here, said that “one of the key proponents which helped spur this growth was the Japanese Government’s export body, the Japan External Trade Organisation. Founded in 1958 to promote Japanese exports abroad, the organisation’s focus on spirits was strengthened by the Japanese Cabinet’s 2013 resolution to develop a strong export environment for Japanese spirits.

“Since then, government policies to support Japanese spirits exports have included:

  • designating certain spirits as an export priority, setting clear targets for countries and
  • export volumes,
  • support for cultivation of sales channels, such as exhibiting Japan-produced spirits at
  • large-scale overseas trade exhibitions, subsidising distillers’ efforts in developing new
  • markets such as making tourism sites based on spirits or
  • marketing in new markets, and providing market information for distilleries interested
  • in exporting,
  • expanding the use of geographical indicators, and support the abolition of tariffs and
  • import restrictions on Japanese exports; and,
  • supporting education and technological changes to improve safety, quality, and
  • innovation in the industry.”

According to Paul McLaeay, “the significant growth of Japanese spirits exports hasn’t happened by accident.

“The Japanese Cabinet resolved in 2013 to develop a strong export environment for Japanese spirits, empowering the Japan External Trade Organisation to provide dedicated support for the sector.

“Initiatives included the setting of clear targets for countries and export volumes, showcasing Japanese spirits at overseas trade exhibitions, and providing market information for distilleries interested in exporting.”

All of the 105 submissions to the inquiry are publicly available here.

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