Australia tax freeze favours beer over spirits
A temporary duty freeze on beer in Australia has been branded “discriminatory in every sense” as it favours “brewers over distillers and pubs over bars”.
The Australian government announced on Saturday (1 March) that it would halt tax increases on draught beer from August 2025 for two years.
Alcohol in Australia is taxed twice a year in line with inflation, with the country having the third-highest tax for spirits in the world.
However, the recent move by prime minister Anthony Albanese has been called out by trade body Spirits & Cocktails Australia for excluding spirits.
Spirits & Cocktails Australia chief executive Greg Holland said there was no policy justification to support a tax freeze on only beer.
“The tax on spirits is already three times higher than it is on beer,” he said. “Freezing draught beer excise alone is discriminatory in every sense – it favours beer drinkers over spirit drinkers, brewers over distillers, and pubs over bars.”
Last month, the Inquiry Into Food and Beverage Manufacturing in Australia recommended the formation of a Spirits Australia trade body to support the industry, similar to the wine sector.
Holland said the government has “ignored the spirits industry’s calls for sensible alcohol tax reform”.
“These recommendations were supported by a bipartisan parliamentary committee in its recent report on the food and beverage manufacturing inquiry,” he noted.
“Yet the government has baulked at the alcohol tax reform it knows is desperately needed by the 700 distilleries operating across Australia, 50% of them in regional areas.”
Australian Distillers Association chief executive Paul McLeay said the government’s “favouritism of the beer sector was disappointing”.
The announcement also casts a shadow over Albanese’s recent move to provide distillers in Australia with an extra AU$50,000 (US$31,658) in tax relief from 1 July 2026.
McLeay said the tax cut for beer alone has “put a dampener” on the forthcoming duty relief for distillers.
He continued: “We’ve spent the past year advocating for the industry’s opportunities for growth, including our potential to become an AU$1 billion export industry within the decade.
“The government has so far overlooked this economic opportunity, so we hope there are further policy announcements that will enable us to realise this potential.”
The latest measure also comes ahead of a general election in Australia in May. Albanese, leader of the Labor Party, is expected to seek re-election for a second term after becoming prime minister in 2022.
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