Spirits left on ice as alcohol taxes rise again
Image: 5PH/Depositphotos
Alcohol prices in Australia rise twice a year (February and August) as excise on commercially produced alcohol is indexed to inflation — a familiar headache for venues and punters.
There was some relief last year, when Prime Minister Anthony Albanese announced Labor would pause the biannual indexation of draught beer excise for two years, calling it a “win for beer drinkers, brewers and hospitality businesses.”
However, Spirits were not included and today, spirits excise rises again to $107.99 per litre of alcohol, making Australia’s spirits tax the second-highest in the world.
“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 former Australian Distillers Association General Manager and Four Pillars Distillery Co-founder, Cameron Mackenzie, in January 2025.
“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.”
Parliament is expected to resume debate this week on the draught beer freeze, and MPs are being urged to back an amendment extending the pause to tap spirits served over the bar in pubs and clubs.
“Spirits are a growing part of the product mix for pubs, clubs and small bars and appeal to a wide variety of consumers, particularly women and younger adults,” said Spirits & Cocktails Australia executive director, Steven Fanner. “Spirits are taxed more than beer or wine, and the tax increases every six months. This latest rise will mean around $32 of the price of a standard 700mL bottle of gin or whisky is tax going straight to the Government.“
“Applying the freeze to tap spirits as well as tap beer would ensure many more people having a drink with friends on a Friday night benefit from this sensible cost-of-living measure.”
“We’ve seen some real progress in recent months to foster vibrant 24-hour cities, but for many consumers, the rising price of a mixed drink or a cocktail makes going out a luxury.”
“For venue owners, particularly those with small bars, these twice-yearly tax hikes become very difficult to wear and even harder to budget for.”
Alongside the beer pause, the government plans to lift the excise remission cap to $400,000 for eligible alcohol manufacturers and 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.”
“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. “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.”
More information on alcohol excise is available via the ATO website.
Jonathan Jackson, 3rd February 2026
