Last night’s Federal Budget delivered some surprise excise benefits for small brewers.

The Australian Government announced it will extend the current microbreweries excise refund scheme by increasing the maximum refund amount from $10,000 to $30,000 and removing the current production eligibility threshold of 30,000 litres of beer, with effect from 1 July 2012.

The amendments will allow breweries to receive an excise refund of 60 per cent of excise paid, up to a maximum amount of $30,000 per financial year. They will also ensure that the refund does not penalise successful local breweries as they expand their production.

The budget announcement says that this measure is estimated to have a cost to revenue of $10.0 million over the forward estimates period.

Reaction from Australia’s small brewers has been positive, with many pointing out the benefits that this change will bring.

Veteran beer writer, and owner and brewer at Tasmania’s Seven Sheds brewery hailed the change.

“For a brewery of our size it’s brilliant,” Willie said explaining that under the current regime once a brewery exceeded 30,000 litres they lost any rebate.

“Once you exceeded 30,000 litres you didn’t make back what you lost until you passed about 50,000 litres.”

Sunshine Coast Brewery’s Greg Curran agreed, saying that the current scheme actually acted as a barrier to breweries like his growing.

“Once you pass 30,000 litres you need to grow dramatically to regain what you lose and, at least in our case, we then come up against capacity barriers.”

“At less than 30,000 litres you’re not really viable, and the excise arrangements made it difficult to grow” he said.

Many brewers have expressed that the $30,000 refund represented half an additional salary, or in some cases a salary for the brewery owner.

The excise campaign has been a long running issue for a succession of brewers, though it has recently been given impetus with the support of Senator Christine Milne and Rob Oakeshott MP.

Brewer Ashley Huntington took to Facebook to recognise them for their energy on behalf of small brewing businesses across the nation. A copy of Senator Milne’s media release is reproduced below.

However, as Willie Simpson, pointed out the changes have yet to be enacted and that all brewers with an interest in the matter should probably write to their local representative and state Senators urging that they support the proposed changes.

Media Release – Senator Christine Milne

Excise reform will help microbreweries flourish

Reforming the excise treatment of beer from microbreweries, long lobbied for by the Australian real Craft Breweries Association and the Greens, is a good start to supporting the growth of a sustainable industry creating great regional jobs.

The production cap in the definition of microbrewery and the low excise rebate threshold meant that the excise scheme had been crippling the growth of the industry.

“I’ve been campaigning for this change to support the microbrewery industry in Australia since 2008 because small craft breweries are fantastic, sustainable jobs creators particularly in rural and regional Australia, supporting local producers and increasing local tourism ventures,” Australian Greens Leader, Senator Christine Milne, said.

“The removal of the cap on the amount of beer a microbrewery can make without losing any excise rebate assistance will help craft breweries grow and compete without this arbitrary handicap.

“The lifting of the 60% excise rebate cap from $10,000 to $30,000 is also welcome, but given that alcohol excise increases twice a year every year with CPI and had not increased for over a decade, does not go far enough.

“The Greens will keep working on this issue to secure indexation of the $30,000 cap on excise rebate, to make sure this fairer threshold doesn’t once again become completely out of step with regular excise increases.

“The Government has made good steps on this reform. Why not complete the task and grow more regional jobs?”

Details to the changes to the microbrewery excise can be found at:
http://www.budget.gov.au/2012-13/content/bp2/html/bp2_revenue-09.htm