It would leave a bitter taste in anyone’s mouth to pay $20 (US$13) in tax on a slab of beer, especially those who brew the amber fluid.
On Aug. 5, the federal government’s alcohol excise will increase again, resulting in drinkers paying $20 in beer tax for a carton of full-strength and additional costs for a round at the pub.
According to the brewing industry, Australia now has the third-highest beer tax globally, trailing only Norway and Finland.
At a time when Australians are already grappling with the cost of living, this additional burden is putting pressure on many smaller breweries, leading to closures and administrations.
One of the latest casualties is Billson’s in Victoria’s northeast, which recently declared voluntary administration.
Several other smaller breweries have also shut down, indicating that the challenges are not limited to the small end of the industry.
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In June, beverage multinational Lion announced its decision to shift production of its James Boag line from Tasmania to the mainland.
Lion Australia managing director James Brindley noted that it had been a challenging period for both large and small brewers, with continuous federal tax increases contributing to declining beer sales and production volumes.
However, not all is doom and gloom in the industry, as some breweries like Melbourne’s Moon Dog are defying the odds.
“Moon Dog has grown from a small backstreet operation to a larger brewery and two suburban venues over 14 years,” co-founder Karl van Buuren shared with AAP. “Expanding our beverage offerings beyond beer and creating unique venues in key markets has helped us navigate these changing times.”
Similarly, Steve Jeffares, co-founder of Stomping Ground brewery in Collingwood, emphasized the importance of focusing on local markets for survival.
“While many are experiencing sales declines, breweries that offer a hospitality experience can still thrive by connecting with cost-conscious consumers seeking social interactions,” Jeffares explained.
The industry’s biggest challenge lies in managing increasing operational costs and declining consumer demand for craft beer due to high inflation and interest rate hikes, he added.
Some breweries are also dealing with deferred tax debts from the pandemic and biannual beer excise increases.
John Preston, chief executive of the Brewers Association, criticized the escalating tax hikes, stating that they are negatively impacting beer drinkers, pubs, and clubs.
