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Distillers say raised tax cap will benefit producers

The Australian Distillers Association and Spirits and Cocktails Australia have welcomed the Government’s announcement  to increase the excise refund cap for small distillers and brewers from $100,000 to $350,000 per year as part of the 2021-22 Federal Budget. 

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This decision marks an important first step in the alliance’s campaign to unleash the potential of the Australian spirits industry, and will deliver much needed assistance to more than 300 craft distillers around Australia, most of whom are based in rural and regional areas. 

It means craft distillers will have more capital available to help their businesses grow and to employ more locals – bringing important economic benefits through job creation, expanding farm production, regional tourism and hospitality for our communities.

“This announcement provides much needed relief for hundreds of craft distillers around the country that were severely impacted by COVID-19," Australian Distillers Association president Stu Gregor said.

“We have great ambitions to grow Australia’s world-class distilling industry and this is a great first step that will help the industry to grow.”

Spirits and Cocktails Australia chief executive Greg Holland said:

“The best alcohol tax system is a fair one, so we thank the Government for bringing the incentives offered to small distillers and brewers in line with those offered to small wine makers.  

“However, we note that Australia’s alcohol tax regime remains fundamentally flawed and unfair, imposing a spirits tax that is already ten times higher than the US rate, and 68 per cent higher than New Zealand’s, with further increases every six months.

“We look forward to continuing to work with the Government toward a fairer and more sustainable spirits tax regime – one that aligns spirits tax rates with brandy, and freezes CPI increases – to create jobs, investment and export opportunities in a burgeoning Australian industry.”

The Brewers Association of Australia also welcomed the announcement.

John Preston, CEO of the Brewers Association, said: "There’s nothing better than Australian brewed beer and that’s why we welcome this decision which will particularly help smaller brewers.

“Covid-19 has hit our sector hard with 44 million schooners destroyed last year due to lockdowns, $1 billion lost in beer sales in pubs and clubs and many venues still operating under restrictions.

“Australia’s beer tax is the fourth highest in the developed world so as our world class beer and hospitality industries rebuild we would also welcome the Government cutting the tax rate on draught beer to support hospitality and brewing jobs right across the country.”