![\"Australia-spirits-report\"](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/10\/Australia-spirits-report.jpg\")
In 2024, the spirits market in Australia was worth more thanUS$4 billion (IWSR)<\/p>\nAustralia\u2019s operating environment may make it difficult for homegrown spirits to win domestically and internationally, but it\u2019s certainly not impossible.<\/p>\n
In 2024, the spirits market in Australia was worth more thanUS$4 billion (IWSR)<\/p>\n
*This feature was originally published in the September issue of The Spirits Business magazine.<\/p>\n
The constant focus on excise tax and talk around a cost-of-living crisis might be making a lot of negative noise in Australia\u2019s spirits industry, but there is still plenty of potential for the country\u2019s spirits makers to make a mark on home soil.<\/p>\n
In 2024, the spirits market in Australia was worth more thanUS$4 billion, according to IWSR data. The forecast for all spirits in the country is expected to slightly grow at a compound annual growth rate of 1%, in both value and volume from 2024 to 2029, and again from 2029 to 2034.<\/p>\n
In Australia there\u2019s been an enormous boom in domestic craft spirits, says Matt Jones, co-founder of Four Pillars<\/a>, citing his gin brand as a leader of that explosion. But, he says: \u201cAustralia is a tough environment because you\u2019ve got a relatively small population of consumers, and it\u2019s a reasonably finite market with a very big tax regime, which I see as a big speed bump that as a business you\u2019ve got to get over. But within that, there\u2019s also the opportunity and appetite to do different and interesting things.\u201d For Jones, Australian brands need to be clearer about why they deserve a spot on the shelf, with space being at more of a premium. \u201cThere are probably too many brands that think they can go national and then go international,\u201d he says. \u201cBut there\u2019s always room for something different and something better.\u201d<\/p>\n In Australia, inflation has increased the price of spirits, alongside the biannual spirits tax hikes (the world\u2019s third-highest rate for spirits tax), but there are strong city markets with large consumer bases. \u201cParticularly if you look at Sydney and Melbourne,\u201d Jones continues, \u201cyou\u2019ve got such strong bar scenes, such strong restaurant dining, food and drink hospitality scenes. Both are worth around six million in population each, so they\u2019re big cities to build brands in, but if your opportunity is creativity, to do things differently, then the job isn\u2019t finished when you build the distillery and create the liquid; you need to finish the job and build the brand.\u201d Jones points out one of the macro themes hitting craft distillers hard is a return to bigger global brands, especially with gin, which has softened in Australia. \u201cYou\u2019ve seen people having less money in their pocket and wanting to prioritise spending on travel and experiences. So more tickets to see Taylor Swift and fewer boutique craft gins for their back bar at home,\u201d Jones adds.<\/p>\n Artificially low price<\/p>\n Charlie Maas of Papa Salt<\/a> \u2013 a coastal-inspired gin from Byron Bay that he co-founded with actor Margot Robbie and friends \u2013 says the brand has to keep its price low in Australia to compete. \u201cWe have to do a lot of things. We support the on-trade as much as we can because we want Australians to like the product and be proud of it, but we have no illusions that we\u2019re going to make money selling gin in Australia.\u201d<\/p>\n Like Jones, Maas sees a big opportunity in the domestic on-trade, where brands can support local venues. \u201cPeople want to drink local. There\u2019s an iconic Australian restaurant called Gimlet in Melbourne where they sell around 1,000 gimlets a week. They use Geraldton wax (a local botanical) in the cocktail that gives it local provenance, but they\u2019re also using Tanqueray Ten as the gin. I asked my distributor \u2018how do we get into the Gimlet?\u2019\u201d Outside of Australia\u2019s main retailers (Endeavour, Dan Murphy\u2019s, and Coles Group) where it can be tough to compete against bigger international brands who can offer better pricing, Maas counters that in the on-trade \u201cthere\u2019s a lot of room to grow, to build a gin business, or any business, and to also help the on-trade offer something that you can\u2019t get at home\u201d.<\/p>\n Matt Sanger, co-founder of ready-to-drink (RTD) brand Curatif Cocktails, has been able to ride the \u2018drink less but better\u2019 movement that\u2019s crept into Australia, and the rise of RTDs. The brand makes premium canned cocktails that, as a result, come at a higher ABV and price. \u201cIt\u2019s moving into \u2018let\u2019s have a full-expression cocktail\u2019 rather than \u2018something that\u2019s got some passion fruit and some vanilla in it and reminds me of bad decisions\u2019,\u201d he says.<\/p>\n Curatif has collaborated with big brands such as Appleton Estate and Tia Maria, which Sanger describes as a win-win situation. \u201cThere\u2019s no disadvantage to being called out as an ingredient of a cocktail if the cocktail is great, so we get a lot of outreach from brands at all ends of the spectrum in relation to commercial size,\u201d he explains.<\/p>\n According to a Mandala report, Australian spirits could reach AU$1 billion (US$653 million) in annual exports by 2035,\u00a0if the government freezes the twice-yearly spirits tax hike. While the tax has been central in creating a perfect storm for the nation\u2019s spirits industry, there are other challenges. Sanger suggests a bigger challenge is around the questions of \u201cHow do we make a great product? And how do we go about communicating that in an effective way?\u201d<\/p>\n Curatif amplifies visibility with partnerships at Marvel Stadium in Brisbane with the AFL and on board Quantas, where it has created canned cocktails for the airline. \u201cThat\u2019s sort of opportunity and challenge mixed up, which is, you\u2019ve done all this work on making a great product, so how do you actually get it into people\u2019s hands?\u201d<\/p>\n Rare opportunity<\/p>\n One brand that\u2019s caught the eye of a big gun is Never Never, a gin from New South Wales. \u201cIt was certainly one of those rare opportunities,\u201d recalls co-founder Sean Baxter about the moment when Asahi Beverages came knocking on the door. The brand was acquired by Asahi in May 2024. At the time of the acquisition, Never Never co-founder George Georgiadis said that would help the brand realise its vision to \u201cgrow Australia\u2019s gin market, where around 80% of the gin Australians drink is imported \u2013 despite Australia being home to some absolutely cracking gin brands\u201d.<\/p>\n Baxter confirms saturation is a challenge: \u201cThere are only so many gin consumers here when it comes to how many times you can slice up the pie. When more gin distillers come into the category, the pie becomes smaller for everybody, right? Some bigger brands will need to adjust for that, and other smaller brands will have to manage their expectations when it comes to how quickly they grow.\u201d<\/p>\n Talking about Asahi\u2019s impact, he says: \u201cA couple of years ago, we were making people redundant then last year we went from 10 full-time workers to 30, and we\u2019re able to build our business in South Australia.\u201d<\/p>\n Asahi\u2019s involvement was a welcome opportunity for the brand to start addressing some of its challenges, such as packaging and transitioning from a 500ml to 700ml bottle.<\/p>\n \u201cI don\u2019t think we would have been able to do that without that partnership,\u201d Baxter continues. \u201cThat was certainly a pretty expensive exercise. [The deal] is still very early days, and we\u2019re still having to pull through a lot of old stock at retailers, but early doors the signs are very positive. It allowed us to bring our net price down, become a little bit more competitive on the shelf \u2013 all things in an economy where there\u2019s a lot of price-point pressure and a lot of customers seeking value.\u201d<\/p>\n Never Never makes gins with pretty innovative botanicals such as oyster shells and Grenache grapes (with an expression called \u2018Ginache\u2019) to sit alongside its flagship triple-distilled juniper. For Ginache, Australia is home to an educated wine audience and the gin can tap into this. Baxter dubs these types of wine-inspired gins as Australia\u2019s \u201cversion of sloe gin\u201d, and an example of how Australian spirits can distinguish themselves from the rest and use local ingredients as a strong point of difference.<\/p>\n Four Pillars and its Shiraz gin is also a pioneer in this regard. Addressing Australia\u2019s ability to innovate more freely than other nations, and with regional ingredients like wine grapes, Baxter says: \u201cWe\u2019ve got some really relaxed regulations around spirits definitions. There\u2019s a lot of freedom with how we make not only gin, but whisky and brandy and all sorts of other things. We do have opportunity there.\u201d<\/p>\n Starward is a brand that\u2019s grasped this opportunity. Like Four Pillars, the Melbourne-based whisky has paved the way as a successful Australian spirit, and has cultivated a longstanding relationship with Diageo, having received investment from the drinks giant\u2019s now-defunct Distill Ventures business.<\/p>\n Founder David Vitale has previously spoken about his goals of becoming a top-five global world whisky brand. It attracts acclaim with whisky finishes in Australian red wine barrels and ginger beer casks. \u201cYou can shoot a cannon through the regulation, it\u2019s really exciting,\u201d Vitale says of the freedom he\u2019s able to play with. \u201cThat would not be allowed to be called Scotch in Scotland because the ginger is a predominant flavour, which isn\u2019t part of the repertoire of Scotch profiles.\u201d<\/p>\n This means many Australian spirits don\u2019t come with the baggage that some traditional producers have to carry. Craft Australian spirits face a unique challenge, however, which Vitale contrasts with the situation that craft beer was able to take advantage of: \u201cUnlike craft beer, where you could quite compellingly argue that institutional beer was broken and craft beer was more flavourful and interesting, what\u2019s broken in spirits?\u201d he asks. The mainstream international spirits and whiskies that Starward competes against are well-crafted and mostly excellent products, so the job of an Australian spirit, Vitale says, is to be \u201creally interesting and compelling to drinkers, and get them to move from something that\u2019s great to another thing that\u2019s great, but with just a little bit more to them that they can identify with\u201d.<\/p>\n Play to your strengths<\/p>\n Leveraging home advantage is something Four Pillars has perfected with its gins. The brand uses native Australian lemon myrtle as one of its base botanicals, separating itself from the classic London Dry and those brands that typically tend to use coriander seed and citrus peel. This \u2013 along with the brand\u2019s Shiraz and Olive Leaf expressions \u2013 have almost set the tone of what a modern Australian gin can be. \u201cYou\u2019ve got to play to your strengths,\u201d asserts Jones. \u201cIf we play to what our country is rightfully famous for, then we\u2019ve got a much better chance of success than if we choose to play to someone else\u2019s strengths.\u201d Jones feels as though Australian gin, and spirits, are at their best when trading off what the consumer around the world thinks of when they think of Australia. \u201cWe\u2019re not world famous as a gin producer, but then again neither is Japan, and one of the fastest-growing gin brands in the world is [Suntory-owned] Roku. Italy isn\u2019t either, but one of the strongest gin brands in the world is [Pernod Ricard-owned] Malfy.\u201d<\/p>\n Another advantage Australian spirits producers have is their close proximity to Asia, observes Tom Baker, founder of coffee liqueur Mr Black. Even though Australia\u2019s distance from major export markets causes problems with travel time and immense costs (especially in gin with sourcing juniper from Europe), Baker believes the easier access to Asia can be helpful.<\/p>\n He says: \u201cOur proximity to Asia means we get glass bottles and caps. You go to Texas and they\u2019ll have the same complaints about what they can\u2019t get. Everyone\u2019s got problems. Australia has this great advantage with Asia and Southeast Asia, for sourcing both ingredients or raw materials quite cheaply to make your product.\u201d<\/p>\n Mr Black is also another example of an Australian success story, sold by Baker to Diageo in 2022, and arguably now the pre-eminent coffee liqueur brand. While Diageo has supported the brand\u2019s expansion around the globe, Australia is still its second most important market behind the US.<\/p>\n \u201cIt\u2019s our home market, it\u2019s obviously going to be important,\u201d he says. \u201cTaxation is such a drain on the success of spirits in Australia, though, that it makes it a hard market for local producers.\u201d<\/p>\n Baker says an upside is Australia\u2019s retailers, which he praises as great to work with. \u201cWe\u2019ve got very large retailers that kind of [hold] half the market together \u2013 Coles, Woolworths, and Endeavour. We\u2019re a great retailing nation for spirits, so if you can crack it, it\u2019s a really good market.\u201d He notes, however: \u201cYou\u2019re trying to crack it like Sisyphus with the rock \u2013 just when you think you get some progress the tax bill comes in. You\u2019re trying to win at a disadvantage from beer and wine and a lot of RTDs. For Australian spirits to truly take off, real support needs to come in from the Australian government, like it has for wine and beer.\u201d<\/p>\n Holly Klintworth, president of the Australian Distillers Association, echoes the need for spirits to receive this treatment. She says \u201cthere is a real job to do\u201d in modernising the landscape and policy settings for Australian distillers. She says they are \u201cfacing a battle not only locally, but also abroad because we have less capital to reinvest in our businesses for growth compared with our international counterparts\u201d. The establishment of a Spirits Australia was recommended in the 2024 Parliamentary Inquiry into Food and Beverage Manufacturing. It would ensure a coordinated approach with the government in marketing support, trade strategies, and product-quality measures, to build international recognition for Australian spirits. \u201cToday for spirits, it\u2019s worth around AU$210 million, but the Mandala report demonstrates that with the right government support this could grow to be a AU$1 billion export industry within the decade,\u201d Klintworth says.<\/p>\n Baker notes a trade body for the industry can\u2019t come fast enough. \u201cIt would be such a transformational thing for the economy to have that taxation treatment.\u201d Mr Black is now a fully-fledged Diageo brand that counts on the US as its biggest market, but Baker contends: \u201cWe can\u2019t expect everyone to have to export their product to succeed because they can\u2019t afford to export unless they have a profitable local business. Success starts at home, and while Australians are still shackled with exorbitant tax rates on spirits, which will inhibit demand for spirits, then we won\u2019t be able to export. That\u2019s at all levels, not just craft producers.\u201d<\/p>\n What would help Australian spirits to better compete with the well-known international brands domestically?<\/p>\n Lucy Smith \u2013 founder, Neurita Tequila<\/p>\n \u201cThe Australian spirits industry is at the forefront of global innovation, closely following the US in per capita growth of Tequila and Margarita consumption. As one of the first markets to pioneer locally produced \u2018agave spirits\u2019 as a homegrown alternative to Tequila, Australia continues to push boundaries. It is also leading globally in non-alcoholic categories and the RTD (ready-to-drink) sector. While Australia can be introspective as an island nation, there\u2019s a clear opportunity for our distilleries to claim a stronger presence on the world stage. To do so, more producers must be willing to take bold steps, accelerate their global expansion, and fully embrace the international spirits market.\u201d<\/p>\n Related news<\/p>\n \n \n ![\"Australia-Four-Pillars-Curatif\"](\"https:\/\/www.newsbeep.com\/au\/wp-content\/uploads\/2025\/10\/Australia-Four-Pillars-Curatif-640x362.jpg\")
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