Beer Tax! What does this mean to our Hospitality Industry?
Published on September 3, 2025
Beer Tax! What does this mean to our Hospitality Industry?
By FoodPEEPS News | September 3, 2025
- Tax Increase Impact: Beer prices will rise approximately $1 per schooner starting February due to the government's alcohol excise tax being adjusted for inflation twice yearly
- Industry Challenges: Over 600 independent breweries across Australia are facing severe financial pressure from rising costs of ingredients, utilities, and reduced consumer spending
- Business Closures: In the past 18 months, 46 independent brewing businesses have entered administration, closed, or been liquidated, resulting in hundreds of job losses
- Profit Margins: Small pub owners operate on extremely thin margins - from a $10 schooner, only minimal profit remains after covering product costs (30%), staff wages (35-40%), rent (15%), and other expenses
- Market Dominance: Two major beer companies (Carlton & United Brewery and Lion) control most major brands and allegedly use pricing strategies that favor large operators while charging significantly more to small venues
- Regional Impact: About 60% of independent breweries operate in rural areas, serving as community hubs, local employers, and supporters of regional activities
- Export Comparison: Australian spirits rank 29th globally in exports ($112M) compared to wine at 6th place ($2.1B), attributed to the spirits tax being five times higher than wine tax
- Tax Burden: Beer venues must pass on roughly 90 cents per dollar of tax to customers, with industry groups warning pints could regularly cost $15 in local pubs
- Political Response: The National Party has expressed support for excise reform, while some Liberal MPs remain skeptical about tax reductions, preferring to focus on reducing inflation first
- Call for Action: Industry advocates are urging government support for local breweries, particularly given many federal electorates contain at least one local brewery