Pour one out for Australia’s beer drinkers as the price of an ale at the pub surges up to $15 following the largest tax hike in more than three decades.
The Australian Tax Office announced the excise on beer would be lifted by 4%, or $2.50 more a liter on Monday under its CPI indexation review.
The Brewers Association of Australia said it was the biggest increase in more than 30 years to hit a market that was already taxed more than “almost any other nation”.
“We have seen almost 20 increases in Australia’s beer tax over the past decade alone,” CEO John Preston said.
“Sadly, we’re now seeing the impact as pub patrons will soon be faced with the prospect of regularly paying around $15 for a pint at their local.
“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 ongoing impacts of the pandemic.”
Australia’s excise on beer is adjusted twice a year according to inflation, which is growing at its fastest pace in more than two decades with a peak not expected until the end of the year. Wine operates under a separate taxation system.
A report by economist and University of Adelaide professor Kym Anderson AC, commissioned by the Brewers Association in 2020, found Australians paid the fourth-highest beer tax in the world compared with advanced OECD and EU countries.
Only Norway, Japan and Finland paid more.
The next highest-taxing countries were the United Kingdom and Ireland, but their rates were still about 30% lower than Australia’s between 2018 and 2020.
At $2.26 a liter of alcohol, Australians paid a whopping 18 times more than Germany, 15 times more than Spain, seven times more than the US and six times more than Canada. It also paid nearly double its neighbor in New Zealand.
In 2020-2021, the government received $2.5bn in excise and customs duty on beer, including draft and packaged beverages. The beer tax accounted for about 42% of the retail price of a carton of beer.
At the same time, Australians have been named the heaviest drinkers in the world – spending more time drunk than any other nation in 2020. And beer is a popular drop.
According to the latest ABS figures, beer accounted for 39% of the 191.2m liters of pure alcohol available for consumption around Australia in 2017-2018.
Preston said brewers and operators were “extremely disappointed” the former government didn’t reduce the beer tax in the March budget as was proposed, and called for beer tax relief prior to another raise in February 2023.