“It’s no surprise that Australia’s independent craft brewers have been challenged in these last 12-18 months,” says Kylie Lethbridge, CEO of the Independent Brewers Association (IBA).
“At our last count, and I’m sure there are others we’re not aware of, 46 of our breweries have either gone into voluntary administration, liquidation or simply closed their doors.”
The industry has been heavily impacted by these closures, leading to significant job losses and supply chain issues, and due to reduced income, the IBA was forced to reduce its operational staff, cancel the 2025 Indies Independent Beer Awards and BrewCon conference.
Growth-inhibiting tax increases
With almost 700 independent craft breweries across the nation, there is one challenge impacting almost every brewery – the bi-annual CPI increase, which has led Australia to have the world’s third-highest beer tax.
“Along with spirits and fuel, ours is the only tax that increases twice a year, unlike the wine equalisation tax (WET) which hasn’t increased since 1999.
“In our view, it’s an unfair playing field. It means that those operating under WET are highly resourced by the Federal Government, yet beer is completely unsupported. It has no minister, no policy or strategy framework, and that’s why it continues to be ignored,” Lethbridge explains.
Making up a significant portion of the cost of beer, Lethbridge says the craft brewing industry has for many years absorbed excise increases, but with ingredient, production and freight costs also rising, that’s no longer feasible, forcing brewers to raise their prices.
“That overlaid with the cost-of-living pressures Australia is experiencing means people cannot afford to spend that little bit extra on independent craft beer. And so that taxation framework, we’re saying, is unfair, and no longer fit for purpose.”
Optimism for the future
While independent craft breweries employ more than 50 per cent of the entire beer industry in Australia, they only account for approximately eight per cent of total beer market share. In 2025, the IBA’s advocacy efforts will reach directly to the consumer to raise awareness and the benefits of supporting our Australian owned independent brewing businesses.
“We’ll also focus on enshrining state strategies where there aren’t any. We’ve done a lot of work in the last four years around state strategies that support independent craft beer, the most recent being the Western Australia Craft Brewing Strategy launched in partnership with the Government and industry.
“We’re looking at finalising the new Queensland artisan liquor strategy, facilitating g an updated New South Wales strategy, finalising South Australia, and Tasmania has been approved, ready to launch. This means that while we work on the federal issues, which is a much longer game, we know our breweries are supported at a local level.”
The association also hopes to relieve some of the financial strain on independent brewers by exploring bulk energy buying.
“We understand that that is one of the greatest costs of doing business, and with the state and federal targets in regard to conversion to renewables looming, without any grant funding underpinning this is going to be a very expensive exercise for a brewery.
“Energy buying has to be done at a state level, so we’ll try and run with one state as a benchmark,” Lethbridge concluded.
This article originally appeared in the National Liquor News Industry Leaders Forum edition.