Prime Minister Anthony Albanese has gone part way in addressing calls from beer and spirit producers to freeze the twice-yearly indexed excise they pay by doing so for two years from this August, but only for beer. The spirits industry says there is no policy rationale to not include spirits in the decision.
The indexation will be frozen from the next consumer price index release on 1 August. Beer and spirits excise has been indexed to the consumer price index twice a year in February and August.
Albanese said the government was doing what was needed to support small and medium local businesses thrive.
“Freezing the excise on draught beer is a commonsense measure that is good for beer drinkers, good for brewers and good for pubs,” Albanese said.
The policy change came a week after he announced an increase the excise remission cap to $400,000 for all eligible alcohol manufacturers and the Wine Equalisation Tax producer rebate cap to $400,000 from July 1 2026.
One of the largest breweries in the country, Lion Australia, welcomed the news and said it was a “great win” for Australian beer drinkers, pubs, and clubs.
Lion Australia managing director, James Brindley, said the decision was a “great first step”.
“It continues to be a challenging time for Australian brewers, hospitality businesses and beer drinkers – and by far the biggest challenge is the continuing twice-yearly increases in Government alcohol excise, which is now the third highest in the world.
“We’ll continue making the case along with others in industry during this much-needed period of relief for a permanent change to Australia’s beer tax system. It’s time to move away from the current approach which is damaging Australia’s pubs and clubs and unfairly punishing responsible Australian beer drinkers,” Brindley said.
Treasurer Jim Chalmers, said, “This is a modest change but will help take a little bit of the pressure off beer drinkers, brewers and bars.”
But Spirits & Cocktails Australia chief executive, Greg Holland, said there was no policy rationale to only apply the freeze to beer.
“The tax on spirits is already three times higher than it is on beer. Freezing draught beer excise alone is discriminatory in every sense – it favours beer drinkers over spirit drinkers, brewers over distillers, and pubs over bars,” Holland said.
“The government has effectively 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,”
For the last two years, Diageo’s Bundaberg Distilling Co. has run a Bundaberg Rum campaign in “heartland Bundy towns” across Queensland and New South Wales telling consumers they pay a 63 per cent tax on a $61.50 1L bottle of Bundaberg Rum UP.
Bundaberg Distilling Co. chair, Amanda Lampe, said spirits in Australia were taxed the highest in the world, outside of Scandinavia, at $104.31 per litre of alcohol.
“We’re disappointed with this announcement. They’ve left every Bundy drinker in the cold with no relief in sight. They will continue to see the tax on their favourite drink go up.
“We are calling on all sides of politics to also freeze this infinity tax on Australia’s spirits drinkers. Australia’s spirits tax is seven times higher than the United States, and significantly higher than the $61.21 New Zealanders pay in tax on spirits, it’s time Bundy drinkers and spirits drinkers in Australia got a fair go,” Lampe said.
“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,” Holland said.
