Tax loophole fuels cheap vodka flood, raising bootleg fears for venues
A tax break worth up to $400,000 is flooding pubs, clubs and bottle shops with vodka priced as low as $30 a bottle, prompting warnings that bootleg spirits could soon rival illicit tobacco as a black-market staple.
According to the Daily Telegraph, alcohol aggregators based in NSW are exploiting the loophole to sidestep rising excise taxes, pushing millions of litres of low-cost, cleanskin-style liquor into venues for only a few dollars above the tax component alone. The masthead's investigation also found some of this stock breaches food safety standards, with alcohol content either too low or too high per volume.
The scheme, introduced in 2021, allows distillers to claim excise tax refunds of up to $400,000. In Victoria, there have been allegations that organised crime groups have used the refund model to generate cash by selling discounted vodka into pubs and nightclubs, a trend industry figures fear could spread further.
The federal government has moved to tighten oversight. Assistant Treasurer Daniel Mulino said the Australian Taxation Office (ATO) is "reviewing" claims made under the remissions scheme and "will challenge those who seek to manipulate the cap through artificial structures or economic control."
The warning comes as online supplier eBev entered administration last week. Industry sources told the Daily Telegraph the platform had been buying spirits in bulk before on-selling bottles to venues at discounted rates under its "Australian Small Batch Spirits" program, marketed as giving venues artisan-style products "at a price that the big guys can't compete with." eBev did not respond to the masthead's questions.
Spirits Council of Australia chief executive Steven Fanner compared the trend to the illegal tobacco trade, warning that steep alcohol tax rates are creating "incentives for opportunistic behaviour."
"This is what we've seen happen in tobacco over the last few years, where illicit products now dominate. And, you can see the beginning of it's starting to happen now in spirits," Fanner said.
He cautioned the issue extends beyond tax compliance to consumer safety. "I don't want to overstate the prevalence of, potentially dangerous alcohol in the market, but, at its worst, contaminated spirits can have serious health effects," he said.
The concerns follow a Herald Sun report last month linking a bartender at a firebombed Melbourne nightclub to a vodka manufacturer allegedly involved in the excise scheme.
Jonathan Jackson, 23rd July 2026
