Australia: Tax is bursting the craft beer industry bubble

Australian craft brewers are facing significant challenges due to a heavy tax regime, which is now the third highest globally, compounded by high inflation. The beer excise, which increases every six months, has risen by over 17% since early 2020, affecting both brewers and consumers. Despite lobbying efforts by the Independent Brewers Association (IBA) for a freeze on the excise, the government has not responded. The IBA is now urging consumers to advocate for more affordable beer and plans to seek an investigation by the ACCC, as well as push their agenda in the upcoming federal election. Major brewers like Lion and Carlton United Breweries continue to dominate the market, making it difficult for independent brewers to compete.

While drinkers look forward to toasting International Beer Day next Friday, Australian craft brewers are drowning their sorrows over a tax regime they say is crippling their industry and is now the third highest in the world. When CPI figures are released on July 31, the latest beer excise rise will be calculated and take effect on August 5. Brewers say the tax has been supercharged by high inflation, with rate rises totalling more than 17 per cent since early 2020. And that’s bad news for price-conscious drinkers. “There comes a point where you can’t continually absorb that, and then you try and pass it on to the punters and you’re losing business,” Perth craft brewer Travis Moore said. The excise rises every six months and brewers say it’s sending them broke. Independent Brewers Association (IBA) chief executive Kylie Lethbridge said the industry lobbied the government for relief in this year’s federal budget but their calls for a 12-18 month freeze on excise were ignored. “So ...