By David Ward – Australian Brewery, Rouse Hill
The Federal Budget released on 8 May has flagged a change in the tax rate for beer in kegs smaller than 48 litres. All kegs above eight litres will now be taxed at the same lower rate.
At the Australian Brewery we believe any kind of focus from the government on helping small producers in the craft beer sector is good focus – even if the first changes are not as dramatic as they need to be.
An extra 70k excise rebate into the pocket for brewers will help small independent producers and allow them to spend more on improving quality and service.
However, with margins in brewing being so small, more changes are needed before bar operators and customers see a change reflected in pricing. More needs to be done to make tax on wine and beer more equitable (lower for beer) – especially if craft beer in Australia is to reach the heights it has in America.
The move to line ball excise on 30-litre kegs vs 50s is great for brewers, delivery drivers and cellar staff around the country, who currently spend all day dragging around heavy kegs. Seventy schooners of ‘Saison’ are a lot easier to move than 110.
It will also open up more pubs, small bars and restaurants to try more slower-moving, expensive kegs that customers now want, which have been hard to justify in light of cost and limited tap space.
Consider though, there is already a glut of contract-brewed beers created by marketing companies entering the market. And this will likely increase with the tax rebates – further restricting market access for established brands known for brewing quality, consistent beers.
But congratulations to the government on looking after the brewing sector, and helping support local jobs and the local economy.