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News
Call to freeze spirits tax in Australia
A trade body is calling on the Australian government to freeze future excise increases after spirits producers began paying more than AU$100 (US$65) per litre of tax on their products.
Twice a year, the excise tax on spirits in Australia increases in line with the consumer price index (CPI). From 1 August 2023, spirits tax rose by 2.2%, following a record 4.1% jump last August and a 3.7% hike in February.
The tax increase in August 2022 was the biggest in nearly 50 years for distillers.
The chief executive of trade body Spirits and Australia, Greg Holland, said: “This cannot be what the policy makers had in mind when they designed the alcohol excise regime in 1983, at which time there were only two spirits manufacturers in Australia. There are now more than 600 businesses subject to this tax.
“When spirits drinkers head down to their local, they should ask themselves why they are paying the third-highest excise rate in the world for their favourite spirit.
“This situation is clearly untenable. We are calling on the federal government to freeze future excise increases so that the policy settings of this industry can be reviewed.”
Australian Distillers chief executive Paul McLeay said the industry had reached the AU$100 per litre milestone six years earlier than previously forecast, meaning the industry is now at a crossroads.
“We can either get the policy settings right to support this industry that is showing so much promise, or tax it into oblivion,” he warned.
“Evidently, the current excise regime is at odds with the government’s stated aim of driving growth in the manufacturing and tourism sectors, and job creation in regional areas, which is where two out of every three Australian distilleries are located.”
In the UK, a similar call was made by trade body the Scotch Whisky Association, who urged the UK chancellor to rule out a further duty rise on spirits, and provide tax breaks for distillers.
From 1 August 2023, the UK government increased alcohol duty by 10.1%
Earlier this year, we spoke to Australian whisky producers about the potential of export markets.