Cheers or tears: Will the beer tax destroy Aussie pubs?

The quintessential Australian pub, a place of camaraderie and comfort, faces a new threat that could see your local watering hole become a thing of the past. The culprit? A formidable beer tax is set to increase next month, February, which could leave many brewers and bars teetering on the edge of survival.

The price of a schooner is expected to rise by approximately $1, a seemingly small amount that carries significant weight in the grand scheme of things. This tax hike is part of the Federal Government’s alcohol excise, which is adjusted biannually in line with inflation rates. The timing couldn’t be worse, as it coincides with a period of economic recovery and rising living costs for many Australians.

A $1 price increase might seem small, but it’s threatening the survival of Australia’s local pubs. Image Source: Pavel Danilyuk / Pexels

Kylie Lethbridge, the chief executive of the Independent Brewers Association, has voiced her concerns, labelling the tax as one of the industry’s most formidable challenges. With over 600 small and independent brewers across the country, the potential impact is vast and deeply concerning.

The recent incident of a Sydney pub patron being charged $22 for a pint has already sparked national outrage, highlighting the sensitivity of consumers to rising beer prices. Andre Sammartino, an associate professor at the University of Melbourne, points out that local operators are struggling against a perfect storm of increased costs for raw materials and utilities, compounded by consumers tightening their belts.

Phil Anderson, owner of Sneaky Possum in Sydney, sheds light on the reality of running a pub. The margins are thin, and the costs are high. Staff, rent, and other fixed costs quickly eat into the profits from each schooner sold. The upcoming excise increase, which will add about $30 to the price of a standard keg, could be the final blow for many small establishments.

The dominance of major beer brands, controlled by conglomerates like Carlton & United Brewery and Lion, exacerbates the situation. These giants wield significant power over pricing and distribution, often squeezing out smaller competitors with their aggressive tactics.

The independent brewing industry has already been battered by the pandemic, with closures and job losses mounting. The social and economic impacts are profound, particularly in regional and rural areas where breweries serve as vital community hubs.

The spirits sector is not immune to the challenges either. Damien Barrow, co-founder of BRIX Distillery, points out the disparity between the taxation of spirits and wine, with the former being significantly higher. This tax disparity hinders the growth and international potential of Australian spirits.

Government policies seem to be at odds with the plight of the brewing industry. Anthea Gerrard, an assistant professor of Law at Bond University, notes that the biannual excise has contributed to the doubling of beer costs over the past decade. The industry is calling for action, urging the government to support local businesses and prevent a return to a less diverse beer market.

Prime Minister Anthony Albanese, whose electorate is home to a concentration of independent breweries, is being called upon to support the industry. Some political figures, particularly from the National Party, have shown interest in examining the excise. However, senior Liberal Party MPs have been less enthusiastic, citing the need to control inflation as a priority.

The upcoming election presents an opportunity for meaningful change. A pause on excise increases or relief for smaller brewers could have significant job-saving outcomes and positive effects on related businesses like suppliers, hospitality, and tourism.

As the cost of living continues to rise, it’s clear that local pubs are feeling the impact. Have you noticed a price increase in your local pub’s drinks recently? Do you think the government should step in to support the brewing industry during these challenging times? We’d love to hear your thoughts on this issue, so feel free to share your opinions in the comments below.

Also read: How to get champagne chic on a beer budget

Abegail Abrugar
Abegail Abrugar
Abby is a dedicated writer with a passion for coaching, personal development, and empowering individuals to reach their full potential. With a strong background in leadership, she provides practical insights designed to inspire growth and positive change in others.

LEAVE A REPLY

- Our Partners -