Bitter Consequences of a $20 Beer Tax

The federal government’s alcohol excise increase on August 5th has left Australians facing a $20 tax on a carton of full-strength beer, with even higher costs at the pub. This move has pushed Australia into having the third highest beer tax in the world, trailing only Norway and Finland.

Amid rising living costs, this tax hike is adding pressure on consumers and brewers alike, leading many smaller breweries to close down their operations or seek administration. One recent casualty is Billson’s in northeast Victoria, which has entered voluntary administration.

The closure of smaller breweries is not an isolated issue. Larger companies are also feeling the strain. Beverage giant Lion announced in June that it would transfer some production of its James Boag line from Tasmania to the mainland. Lion Australia’s managing director, James Brindley, attributed declining beer sales and production volumes to the relentless federal tax increases.

Many breweries are also grappling with deferred tax debt from the pandemic, compounded by the biannual increase in beer excise. Brewers Association chief executive John Preston voiced his concern, stating that the escalating tax hikes are harming beer drinkers, pubs, and clubs across Australia.