Australia: Craft brewers call for flat excise tax on beer

Australian craft brewers have started an initiative to level out excise tax on beer across all packaging sizes. Current tax arrangements favor larger containers for beer. Sold in individual containers up to 48 liters brewers are taxed for their regular beer with AUS$48.57 per liter alcohol, while bigger containers like 50 liter kegs are only charged with AUS$34.21.

Craft brewers with their specialty beers see themselves discriminated by this tax spread because most bars order craft beer only in smaller kegs or in bottles. That puts a higher burden on smaller breweries which was initially not intended by the law. Therefore craft brewers are requesting now the same levy on all beers regardless of type and packaging size.

Lachlan Macbean, founder of Grainfed Brewing Company from Newcastle/New South Wales, stated that “for slower venues or bigger alcohol beers, the cost becomes prohibitive.” And Macbean brings up another topic: “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.”

Currently wineries can claim up to AUS$500,000 annually under the Wine Equalisation Tax (WET) rebate scheme, while breweries are restricted to AUS$30,000 in excise a year. Last year, the Australian Craft Beer Industry Association (CBIA) noted that the cost for lifting the rebate cap for breweries to match that of wineries would cost about AUS$15 million but this money would be paid back many times through the creation of new jobs, increased investments and sales in more than 150 craft breweries in Australia.

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