Aussies who enjoy cocktails and other spirit-based drinks will likely have to pay a little extra for their favourite tipple from August 4. (Source: Getty/Instagram)
While beer drinkers will be spared from another price hike this month, those who prefer spirits will have to dig a little deeper into their wallets. The government put a pause on the alcohol excise duty for beer after serious concerns were raised by brewers and pubs about the impact it was having on the industry.
But that election goodwill didn’t extend to those who drink vodka, rum, whisky, gin and other spirits. A spokesperson for the Australian Taxation Office told Yahoo Finance the excise undergoes a twice-yearly indexation update “based on the upward movement” of inflation, and Monday will be the second time this year that this type of booze goes up in price.
“This is incredibly disappointing,” Australian Distillers Association general manager Cameron Mackenzie said.
“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.
“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.”
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At the last increase in February, spirits exceeding 10 per cent by volume of alcohol went up from $103.89 per litre to $104.31 per litre.
As of August 4, a $1.67 increase will bring that price to $105.98 per litre.
Distillers will have to decide whether to pass that cost onto hospitality venues, who will have to make the same decision on passing it onto consumers.
It’s a war that has been going on in the industry for four decades, but many in the industry are being pushed to the brink.
This comes at a time when many in the alcohol industry fear the cost-of-living crisis is forcing people to stay at home to save money.
Bundaberg Distilling Co. chair Amanda Lampe sounded the alarm about this issue last year and warned this twice-yearly change was changing the way Aussies looked at socialising.
“What our drinkers are telling us is that it’s becoming a luxury to have a drink with their friends on a Friday evening, and that’s really sad,” she told Yahoo Finance.
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CreditorWatch found that one in 10 hospitality venues had closed down in the 12 months to April due to rising costs and decreasing consumer demand.
Bundaberg Distilling Co. Chair Amanda Lampe (right) said distillers like hers are suffering due to the twice-yearly increase. (Source: Instagram/LinkedIn)
The Night Time Industries Association’s quarterly report added that Aussies earning under $150,000 per year couldn’t afford to head out to enjoy a tipple, which is putting further strain on distillers, brewers, and pub owners.
A poll of more than 6,000 Yahoo Finance readers found 83 per cent agreed the twice-yearly would keep them away from pubs, clubs, restaurants, and other venues where alcohol is sold.
Mick Gibb, CEO of the Association, said it was unfair for Anthony Albanese to promise a two-year pause on the beer side of the excise and not offer anything for spirit drinkers.
“We’re not asking for special treatment, just equal treatment,” he said.
“Freezing the beer excise is a great thing, but we can’t leave behind the small bars, live music venues and performance spaces that aren’t running beer taps.
“These smaller venues have been doing it tough for a long, long time. Every time the excise goes up, venues have to make a tough choice – they either try to absorb the flow on the cost of spirits and cut spending on things such as live performances and bands, or they pass it on to price-conscious consumers. It’s a lose-lose situation.”
The government confirmed to Yahoo Finance that the pause on the beer excise is expected to create a $95 million dent in the federal budget over four years.
But Albanese said it was a small price to pay to help the booze industry and its patrons.
“My government is building Australia’s future and to do that we need to support our small and medium local businesses to thrive,” the Prime Minister said in March.
“Freezing the excise on draught beer is a common sense measure that is good for beer drinkers, good for brewers and good for pubs.”
But it’s not applied to all types of beer.
Those who drink beer that’s pulled from a tap at licensed hospitality venues will be spared from the price hike; however, stubbies and cans at the bar or bottle store will cop a hit.
Wine falls under a different type of excise compared to beer and spirits, and is taxed at 29 per cent of its wholesale value.
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