Treasurer Josh Frydenberg has revealed Australia’s small brewers and distillers will benefit from $225million in tax relief, as part of this year’s Federal Budget and not surprisingly industry is delighted with the news.

The Treasurer said that the tax relief will support more jobs and investment to support the growing sector. The move will see a tripling of the excise refund cap for small brewers and distillers from $100,000 to $350,000.

The announcement sees brewers and distillers come into line with Australia’s wine producers and the rebate they receive through the Wine Equalisation Tax.

From 1 July 2021 eligible brewers and distillers will be able to receive a full remission of any excise they pay, up to an annual cap of $350,000. Currently, eligible brewers and distillers are entitled to a refund of 60 per cent of the excise they pay, up to an annual cap of $100,000.

The Treasurer said: “There are around 600 brewers and 400 distillers across Australia, with around two thirds operating in rural and regional areas.

“The announced changes will allow these brewers and distillers to keep more of what they earn, helping them to invest, grow and support around 15,000 Australians that are currently employed in the sector.”

Distillers and brewers have welcomed the news, saying it will deliver much needed and well-deserved assistance and will allow businesses across all of Australia to invest more in their business through greater jobs and opportunity to explore new markets.

Australian Distillers Association President Stu Gregor said: “This is a terrific day for small distillers in Australia and we want to thank the Treasurer and the Federal Government, for supporting small Australian businesses and allowing us to invest more in our people and product to fire-up growth in our sector,”

“We have great ambitions to grow Australia’s exciting, world-class distilling industry and this is a great first step that will see jobs created and businesses grow.

“The Australian distilling industry is still incredibly young compared to so many of our international competitors and yet in a short time we have proven we can make some of the world’s best gins, whiskies and rums. This decision will help us to invest in making more of these award-winning spirits which will in turn mean more Australians employed in making, moving, bottling, packaging, selling and mixing our drinks.

“Everyone in Australia should raise a toast to our great craft distillers (and brewers) tonight.”

The Independent Brewers Association also welcomed the news, with Chairman Peter Philip saying: “Today’s investment from the Morrison Government is helping to rebuild an Australian-owned beer industry that will turbo-charge growth and deliver skilled jobs in family owned, independent breweries around the country.

“Excise tax is the single largest component of the cost of making a litre of beer, and it’s one of the highest beer taxes in the world.

“With this change, small brewers will be able to invest more in people, equipment, and facilities to meet growing demand.”

He added: “This new incentive will accelerate the resurgence of an Australian-owned beer industry, while giving consumers more home-grown choices. Consumers want to support local businesses that keep profits in Australia, which is why Australian beer lovers should look for the IBA Independent Seal for confidence that the beer that they are buying is independently owned.”

The decision was also welcomed by the larger international distillers operating in Australia, who understand consumer tastes are moving towards quality spirits despite a difficult tax regime.

Greg Holland, Spirits and Cocktails Australia chief executive Greg Holland said: “The best alcohol tax system is a fair and sustainable one, so we thank the Government for taking an important first step towards fixing this problem. However, we also stress that Australia’s spirits tax remains the third highest in the world, and this represents a significant dampener on investment and sustainability within our industry.

“With a fairer alcohol tax regime in place – one that aligns spirits tax rates with brandy, and freezes CPI increases – our spirits producers can bounce back from COVID and create even more jobs, buy even more produce from local suppliers, including Australian farmers, and help attract tourism back to regional areas.”

The Treasurer also said that this additional support to brewers and distillers across the country will also serve as much needed relief for those businesses severely impacted by COVID-19.

Andy Young

Andy joined Intermedia as Editor of The Shout in 2015, writing news on a daily basis and also writing features for National Liquor News. Now Managing Editor of both The Shout and Bars and Clubs.

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