Large brewers call for excise freeze not 'distortionary handouts'

The Brewers Association has called for the Australian government to freeze excise in advance of the next scheduled increase, due in August.

The statement calling to ‘put a cap on Australia’s beer tax’ from the peak body representing the interests of CUB, Lion and Coopers, described the price of a beer in Australia as ‘already over-the-top’.

“Now is not the time to be ramping up taxes on consumers,” Brewers Association of Australia CEO Brett Heffernan said yesterday in a media release.

“With more and more Aussies out of work and everyone counting their pennies, jacking up beer tax would be another blow to punters and publicans, alike.

“August 1 is the deadline for averting the next hip-pocket slug to Australians doing it tough.”

“Tax accounts for 42% of the price of a stubby. On a typical $52.00 carton, $22.05 goes to the taxman. When it comes to taxing a drink, Aussies pay the fourth highest beer tax in the industrialised world.

“We’re not asking for a tax cut at this time … just don’t increase the tax. That would spare punters further pain, take pressure off hospitality venues and, because it’s revenue neutral, won’t cost Treasury a cent.

“Putting up the tax in August would be another hit to pubs, clubs and the hundreds of thousands of Australians they need to re-employ once they can re-open in full. Higher taxes will only make that challenge harder when so many are on their knees.”

The BA’s calls for an excise freeze were broadly supported by the Independent Brewers Association.

“The financial impost on brewers in this country is certainly not enabling the industry to prosper and grow so in that respect, I agree with Brett’s comments,” Independent Brewers Association General Manager Kylie Lethbridge said.

“Obviously the impact of this current tax regime on independent brewers is somewhat greater as most are small, family-owned businesses where every cent counts.”

The broad agreement over excise appears to be as far as the agreement goes, with Heffernan recently criticising the IBA’s arguments for more targeted support as ‘concocted’.

Heffernan made the comments in a letter to the editor while responding to an article in the Canberra Times in which IBA Chair Peter Phillip set out the challenges facing independent brewers.

“Indie brewers are at a massive competitive disadvantage to the multi-national mega-brewers because our beer is handcrafted, which means we employ 15 times the number of employees per litre of beer,” Phillip said in the article.

In his response, titled All Froth, No Beer, Heffernan dismissed the small brewers employment case as being ‘concocted’.

“It goes some way to explaining why indie beer is so expensive. It also illustrates the lengths you have to go to in order to concoct an economic argument,” he wrote.

“The call for wine-type tax rebates isn’t the answer. This perpetual handout is distortionary, rewards mediocrity and does nothing for punters. Governments of all persuasions have learned that costly lesson. They are loath to repeat it,” he argued.

“The best thing government can do for everyone looking for relief and recovery – consumers, brewers and hospitality – is freeze the next round of beer tax increases for a year.”

The Independent Brewers Association has previously called for the Federal government to introduce excise rebates for small brewers that match the $350,000 tax relief provided to wine makers.

While the Brewers Association highlighted Australia’s high rate of excise as being the reason for Australia’s ‘over the top’ beer prices, AB InBev last year also noted Australia’s highly concentrated beer market was amongst the most profitable in the world as it looked to sell its local operations.


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