Australians pay the fourth highest excise (tax) on beer in the industrialised world. They then pay another 10 per cent GST on top of that excise, at the retail end, which is automatically increased every six months in Australia.

According to ACIL Allen Consulting, taxes on beer drinkers netted the Australian Government a staggering $3.53 billion last year: $2.01 billion in excise, $201 million in GST on the excise and a further $1.3 billion in GST at the retail end.

The report conducted by ACIL – Economic Contribution of the Australian Brewing Industry 2018-19 from Producers to Consumers, March 2020 – found that by far the biggest cost in the price of an Australian beer is Australian Government tax.

Tax accounts for almost half (42 per cent) of the price of a typical carton of full-strength beer. Of the $52.00 retail price, $22.05 is tax.

The beer tax is set to rise again on 3 August, just as many businesses around the country attempt to recover from the impact of coronavirus.

The industry has rightfully had enough and is calling for the tax to be scrapped as the shutdowns due to COVID-19 continue to wreak economic havoc.

Victoria is once again in lockdown and will be hit hardest.

Margaret Spence, manager at Waurn Ponds Hotel near Geelong in Victoria, “The whole hospitality industry is trying to recover – I don’t think this (tax) should be increased.”
Warun Ponds Hotel has been hit once again by the closure of its business during the current Victorian lockdown. A further impost would place it under further stress as it would have to wear the brunt of the new tax or pass it onto customers in the form of higher prices, which many can’t afford right now.

“It’s the last thing we need right now,” Ms Spence said. “Every time you get an increase it effects sales as you’re forced to put prices up.”

The Federal Government has been called upon to freeze the 37-year-old beer tax, with CEO of Brewers Association of Australia, Brett Heffernan, saying pubs will be hit hard if this tax is brought in as they are all struggling to reopen and reemploy staff in the wake of the pandemic.

“As the hospitality industry battles with the devastating economic impacts of COVID-19, this latest increase in tax comes at a time when publicans and patrons can least afford it,” he said.

“We appreciate politicians of every persuasion are urging people to get down to their local
for a beer to support local jobs.

“However, the taxman will be there from 3 August imposing the biggest beer tax ever.”
The response to the pandemic in other countries around the world has been varied. Germany has lowered its beer tax to zero, while the UK froze its tax at AU$1.52 per litre.

Australia’s hospitality industry is looking for similar consideration.