Repackaging rules changed for cocktails but not beer

Takeaway, repackaged cocktails will be allowed permanently according to the Australian Tax Office, but the repackaging of beer will still require a manufacturer’s licence.

The rule changes come following a year of exemptions and easing of enforcements in which venues were allowed to repackage both beer and cocktails for sale as takeaway products during COVID-19 lockdowns, a decision made to support businesses by preventing ‘double excise’ being paid on takeaway alcohol.

However while the ATO has now made these exemptions around the repackaging of cocktails permanent, repackaged beer is not to receive the same treatment.

“The position in relation to cocktails and beer is different due to the technicalities in the Excise Act, which mean that the ATO can make a permanent concession for cocktails, but can only make a temporary concession for repackaged beer,” an ATO spokesperson told Brews News.

The ATO has updated the interpretation of the term ‘manufacture’ in the Excise Act, and as a result, has deemed that mixing beverages does not constitute manufacturing.

Prior to COVID-19, repackaging kegged beer or cocktails required the venue to be licensed as an excise manufacturer with the tax office, instead of just a hospitality venue such as a café, restaurant or bar, even if they did not have production on-site. Venues could be fined more than $23,000 for offering containers like growlers filled with beer without a manufacturer licence.

This did not impact many brewers who already had their manufacturers licence, but for venue customers, it made repackaging and selling kegged beer to customers an onerous undertaking, which is why the rules were amended during the COVID-19 pandemic.

Both breweries and venues found a small but tangible lifeline in repackaged beer, using everything including milk cartons to sell the beer they couldn’t sell in venues.

However despite these ‘pivots’, it was estimated that at the height of the lockdowns last year, breweries were forced to tip millions of litres of unsold beer down the drains.

The ATO’s permanent rule changes around cocktails then will be welcomed, but those wishing to repackage beer without a manufacturer’s licence will only be allowed to do so until 31st October, according to a release last week from Ben Morton MP, Assistant Minister to the Prime Minister and Cabinet.

Morton has been part of the government’s Deregulation Agenda which has consulted with brewers, distillers and other producers to streamline excise administration for alcohol, which the Government said was “costly and time consuming for both the businesses that manufacture the products, and for the agencies that administer the excise”.

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