Independent brewers and distillers have applauded a pre-budget announcement that they will receive a reduced alcohol excise rate and boosted rebates, raising the prospect of cheaper prices for consumers.
Treasurer Scott Morrison announced that the existing $30,000 annual cap on the excise refund scheme will be more than tripled to $100,000 from 1 July 2019.
Additionally, the government will move to reduce the tax on kegs between 8 and 48 Litres, which are typically favoured by smaller brewers.
He said the move was designed to stop craft brewers and distillers from paying “additional tax”, and allow them “to compete on fairer terms with large beverage companies”.
“There are around 380 craft brewers in Australia located across each State and Territory, employing the equivalent of almost 2,400 people. These brewers are predominantly small businesses and could benefit both from the increase to the excise refund cap and extended access to the concessional draught beer excise rate,” Mr Morrison said.
“There are also over 100 domestic distillers, supporting around 1,600 jobs that could benefit from the changes.”
He added: “This not only champions the craft brewers that we’ve all grown to love, it raises a very tantalising prospect for Australians: the likelihood of cheaper craft beer.”
While stopping short of suggesting prices could fall, the Independent Brewers Association welcomed the tax relief, with its chair Ben Kooyman suggesting it “will enable our members to expand”.
“This is great news for independent brewers, great news for consumers and great news for job creation,” said Mr Kooyman.
“Australia’s 450 small, independent brewers will take that additional excise rebate and invest it back in their businesses. That will mean they will be able to increase their production, invest in quality improvement and most importantly hire more staff.”
Mr Kooyman said the ramifications for the industry are enormous, stating the tax overhaul “has the potential to fundamentally change the way many of our members do business”.
“It will allow them to win customers in smaller venues and in distant markets. And having to deal with full 50 litre kegs is one of the biggest workplace health and safety issues in many breweries. This will give brewers more options,” he said.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.