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The price of alcoholic drinks typically rises twice a year (February and August) as the indexation on commercially produced alcohol, e.g. draught beer, wine, whiskey, vodka, tequila, and more, is applied in line with inflation. This has been happening for decades, but has recently jumped back into the spotlight as the price of a schooner has pinched the pockets of punters.
Recently, the Prime Minister of Australia, Anthony Albanese, announced that the Labor Party will put a two-year pause on the biannual indexation of the draught beer excise, in what he’s calling a “win for beer drinkers, brewers and hospitality businesses.” Set to cost the budget $95 million over four years, a closer look at the fine print shows that the figure only equates to an 18-cent saving on a 48-litre keg of mid-strength beer, which is a saving of about one cent per pint for the consumer.
Meanwhile, the tax on spirits has been ignored. Prices will rise by another $1.67 per litre of alcohol on Monday as Australia’s spirits tax, which is among the highest in the world, hits $105.98. The Australian Distillers Association General Manager, Cameron Mackenzie, says this is “incredibly disappointing.”
“It’s not just another tax hike, it’s a significant one that distillers and hospitality venues simply can’t absorb. In the end, it’s customers who’ll be left paying more for their favourite spirits,” said Mackenzie.
“The Australian distilled spirits industry drives local manufacturing, creates jobs and boosts tourism and hospitality with 50 per cent of distilleries located in regional communities. This tax hike hits everyone: producers, venues and consumers who’ll see higher prices for their favourite gin and tonic.”
With the two-year pause, the government will also increase the excise remission cap to $400,000 for all eligible alcohol manufacturers, and we will also increase the Wine Equalisation Tax producer rebate cap to $400,000 from July 1 2026. “My Government is building Australia’s future, and to do that, we need to support our small and medium local businesses to thrive,” said Prime Minister of Australia, Anthony Albanese. “Freezing the excise on draught beer is a common-sense measure that is good for beer drinkers, good for brewers and good for pubs.”
Night Time Industries Association CEO, Mick Gibb, was blunt in his assessment, asking for equal treatment. “We’re not asking for special treatment, just equal treatment,” he said. “Freezing the beer excise is a great thing, but we can’t leave behind the small bars, live music venues and performance spaces that aren’t running beer taps.”
“These smaller venues have been doing it tough for a long, long time. Every time the excise goes up, venues have to make a tough choice – they either try to absorb the flow on the cost of spirits and cut spending on things such as live performances and bands, or they pass it on to price-conscious consumers. It’s a lose-lose situation.”
The choice to ignore alcohols other than beer is a strange one at face value, but it becomes even stranger the deeper you look. Research published in The Shout shows RTDs are gaining market share from beer, cider, and wine, at a furious rate, as consumers look for “healthier” choices at the bar. The research projects the RTD industry to grow 3.5 per cent between 2023-2028 as new and premium products enter the market.
“We support the freeze in place for draught beer, but it’s only fair that someone approaching the bar for a gin and tonic, or a premix RTD, gets the same relief,” said a spokesperson for Spirits and Cocktails Australia.
“We are seeing cocktails and RTDs becoming more popular in pubs and clubs across the country. Consumers of these products are already paying more excise per drink than beer drinkers, so we should ensure they aren’t left out when the freeze on draught beer comes into effect in August.”
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