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Excise pushes up production costs for Australian brewers

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Australian brewers are experiencing a strain on production costs as a result of the largest alcohol excise increase in decades, reaching 3.84 per cent for full-strength beer. 

The alcohol excise tax increases every six months, and according to the Brewers Association of Australia, Australians are taxed on beer more than almost any other nation. 

“Australia’s tax on beer is going up yet again with today’s increase being the largest in more than 30 years,” Brewers Association of Australia CEO John Preston said, commenting on the recent hike in beer tax. 

“We have seen almost 20 increases in Australia’s beer tax over the past decade alone. Brewers and pub and club operators were extremely disappointed the former government did not deliver on a proposed reduction in beer tax at this year’s March Budget.” 

In addition to the excise, brewers are also seeing a spike in aluminium and ingredient prices, resulting in inflated production costs across the board. 

Majorly used in the packaging, aluminium is expensive due to the energy required to produce it, resource analyst Tim Treadgold told the ABC News. 

“In order to get the can through the plant onto a truck off to the bottling or packaging depot… the trucks that haul up there are running on liquid fuels, which are also expensive,” he said. 

Barley prices are also trading at above average rates, GrainGrowers chief executive David McKeon commented. 

“Right across Australia, we’re looking at bids anywhere into the low to mid three hundreds for for barley [dollars per tonne],” he said. 

“We are seeing a lot of other factors influencing a lot of our processors, manufacturers and retailers… some of those challenges around supply chains, freight costs, labour costs and energy costs.” 

The newly increased excise also means pub patrons can expect to pay around $15 for a pint. 

“For a small pub, club or other venue, the latest tax hike will mean an increase of more than $2,700 a year in their tax bill – at a time when they are still struggling to deal with the on-going impacts of the pandemic,” Preston said. 

“This is a problem that the new Treasurer has inherited from his predecessors and there are many competing demands on the Budget. Nonetheless, we believe there is a strong case for beer tax relief to be provided by the new federal government, with the hidden beer tax to go up again in February 2023.” 

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