Alcohol tax hiked again, expect to pay more

Monday marks another hike in the price of booze, as a tax rise is pushed onto businesses and consumers. Taxes on beer and spirits have effectively gone up 2 per cent on Monday. Twice a year the Australian Taxation Office looks at the consumer price index to see how much the cost of everything has changed, and the tax (excise duty) on alcohol produced here increases if the CPI has gone up. There are different excise costs for beer, products with less than 10 per cent alcohol, and then spirits and other excisable beverages with more than 10 per cent of alcohol. Wine is subject to a different tax regimen. The tax on making a keg of mid-strength beer has risen from $32.33 to $32.98. Each keg of full-strength now costs the manufacturer $43.22, up from $42.37. Just under half the price of a carton of beer is tax, and the excise increase will tack roughly an extra dollar onto the price of a slab. The latest data shows hospitality businesses are facing financially strained operating conditions. One in every 13 Aussie hospitality businesses is forecast to fail in the next year, research published in May found. The Brewers Association of Australia reported 373,500 full kegs had to be dumped in Australia during the course of the Covid pandemic lockdowns, as venues could not trade and the perishable beer went off. Speaking on his radio show on Monday morning, Ben Fordham said his network had been tracking brewery closures around the country, and 30 brewers nationwide had closed in the past 18 months. “More people will drink at home, which is bad for pubs, and it’s not good for people who like to connect with others over a drink,” Fordham said. Spirits and Cocktails Australia chief executive Greg Holland said tying excise to CPI was useless. “It is now abundantly clear that the automatic indexation of excise to CPI has outlived its usefulness as a revenue-raising measure,” he said. “Our hospitality sector is on its knees. Another tax increase will only increase the cost burden on struggling venues.”