E-Malt. E-Malt.com News article: Australia: Beer drinkers slapped with the first of two tax hikes of this year

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E-Malt.com News article: Australia: Beer drinkers slapped with the first of two tax hikes of this year
Brewery news

Australian drinkers on February 3 were been slapped with their first of two tax hikes of the year, thanks to an automatic CPI increase that slugs beer drinkers every February and August, The Shout reported.

For a standard beer with 4.4 per cent ABV, they are now A$1.59 for draught beer and A$2.26 for packaged beer. The volume-weighted average of those two (assuming 25 per cent is sold as draught) is A$2.09 per litre of beer.

Australians are paying the fourth highest excise tax on beer in the world and that tax quietly increases every six months, a fact that Heffernan says is “appalling”.

Speaking to the National Liquor News Industry Leaders Forum¸ Heffernan said that beer tax reform would be high on the agenda for the Brewers Association in 2020.

“It’s clear that Australians simply don’t know what or how much tax is in a beer and, when illuminated, the reaction ranges from shock to outrage. Our putting a toe in the water on this issue publicly has been instructive. We will be building on that in 2020.”

The tax on beer has gone up every six months for the last 35 years and the increase of February the 3rd is the 71st consecutive hike.

In a paper prepared for the Brewers Association of Australia, Professor Kym Anderson AC from the University of Adelaide released new analysis comparing Australian beer tax with OECD and EU countries.

All 42 of the countries reported in Anderson (2019) tax the consumption of beer. However, only three comparable advanced industrial countries – Finland, Japan and Norway – taxed beer more than did Australia in 2018-20.

The next highest taxing countries are the United Kingdom and Ireland, but their rates are about 30 per cent lower than was Australia’s average rate in 2018-20. More than half of those 42 countries had 2018 rates less than one-quarter of Australia’s, that is, below 50 cents per litre of beer.

That report also showed that Australians are paying double the tax of New Zealand (A$1.26) and 17 times more than Germany (A$0.13). And Heffernan says that it’s time for change.

“A massive 42 per cent of the retail price on a carton of beer, is tax. Of the A$52 retail price for a typical carton of beer at 4.9 per cent alcohol, A$21.84 goes to the taxman. Now it’s going up again.

“That a beer is fast becoming out of reach for everyday Aussies is simply wrong. When 42 per cent of the price of a beer is tax, eclipsing any other input cost to be the biggest cost in the price of a beer… that’s political dynamite.

“Without giving too much away, the time is right for beer tax reform. There is no legitimate reason for Australians to be paying top tier tax on a beer compared to the rest of the world. With a variety of external factors in play – cost of living pressures for one – 2020 presents opportunities to get on the front foot and drive a positive agenda for change.”

Jamie Cook, Chair, Independent Brewers Association (IBA), agrees that the alcohol taxation system needs to be modernised and says the IBA will continue to advocate for a system that is more fair to brewers and drinkers alike.

“This is another chapter in the ongoing rise of disproportionate excise tax paid in comparison to other beer drinking countries. The regime needs to be reviewed and modernised, to help assist the small businesses around Australia leading the charge in encouraging drinkers towards a more sophisticated and mature approach to alcohol.

“The IBA will be continuing to advocate for a modernisation of alcohol taxation to a system that recognises and rewards the producers and drinkers that are creating value for the economy and are fostering a more responsible and connected society.”


02 February, 2020

   
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