Alcohol prices in Australia are about to get more expensive with big tax hikes
Alcohol excise duty expected to top $100 a liter is expected to hit spirits drinkers the hardest, with half the cost of a bottle going to the taxman.
Spirit drinkers beware: The price of your favorite tipple is about to skyrocket under the impending tax hike
Alcohol excise duty, which is linked to inflation, is expected to exceed $100 per litre.
In reality, more than half of the cost of buying a $60 bottle of gin will go directly to the taxpayer.
Excise duty on spirits increases twice a year in line with the Consumer Price Index (CPI).
The latest excise hike follows a 4.1 percent hike last year and another 3.7 percent increase in February.
Alcohol excise duty, which is linked to inflation, is expected to rise to more than $100 per litre.
In reality, more than half of the cost of buying a $60 bottle of gin will go directly to the taxpayer
Australians already pay some of the highest taxes on spirits in the world and aren’t expected to hit the $100 per liter mark until 2029, prompting outraged spirits makers and distillers to demand a freeze.
But their calls have fallen on deaf ears as it is understood that the federal government is not considering any changes.
A spokesman for Treasurer Jim Chalmers said: ‘Automatic indexing is long-standing and has occurred twice a year under governments of both persuasions.
‘We respect the ideas put to us but they have to be weighed against other priorities in the budget.’
Australian Distillers Association chief executive Paul McLay said the increases were unsustainable and it was crucial to support the industry, which comprises more than 600 distilleries – primarily small family-owned businesses in regional areas.
Treasurer Jim Chalmers (pictured) said they ‘listened respectfully to the ideas put to us but had to weigh them against other priorities in the budget’.
‘If the government is serious about building a larger, deeper industrial base and creating manufacturing jobs in the regions, it must reconsider this punitive excise regime that discourages manufacturers from investing and growing their businesses,’ he said.
The tax hike has exacerbated industry-wide challenges, he said.
‘Unfortunately, we’ve already seen some volatility this year, and this latest spirit tax increase will be extremely difficult for distillers to stomach,’ Mr McLay said.
Australia already has the third-highest spirits tax in the world, spirits and cocktails chief executive Greg Holland said.
‘Reaching the $100 per liter threshold six years earlier than previously predicted should give the federal government pause to reconsider this handbrake on the spirits industry.
‘Australia already has the third highest spirit tax in the world. This automatic excise increase cannot continue unchecked. If not now, when will it stop?’ Mr. Holland Dr.
Diageo Australia, the company behind Queensland’s iconic Bundaberg rum distillery, has said the current tax system is becoming ‘intolerable’.
‘We know our loyal Bundy consumers love our product, but many of them don’t know that more than 60 per cent of what they already pay for a bottle of Bundaberg Rum UP goes directly to the Canberra taxpayer and that tax just keeps going up and up,’ said managing director Angus McPherson.