Australia: Government freezes biannual tax hike on beer

Australia’s government introduced new legislation to freeze the biannual tax hike on beer in parliament on July 24, but brewers warn the savings may not be passed onto consumers, 9News reported.

Under the current decades-old system, an indexation is applied to the beer excise in February and August each year in line with inflation.

But the continued increases have brought up the prices of a schooner or pint to about A$15, prompting calls from brewers, bars and patrons to put a pause to the controversial indexation.

Prime Minister Anthony Albanese campaigned for this year's federal election on the promise to freeze the indexation on the excise for two years starting from August.

He also said he would increase the excise remission cap to A$400,000 for manufacturers and increase the wine equalisation tax producer rebate cap to A$400,000 from July 1 next year.

At the time, he said this was a "common sense measure" that was a win for drinkers, pubs and brewers.

Treasurer Jim Chalmers touted the freeze as a "modest change" that would take the pressure off the industry and Australians.

The changes come as Australia's monthly spend on wine and beer jumped this year compared to 2024, according to June data by CanstarBlue.

The monthly spend for beer rose by 30 per cent from A$76 to A$99 while wine rose by 17 per cent from A$66 to A$77.

Meanwhile, the average price of beer increased by 4.5 per cent in the 12 months to March.

The rising costs have also taken a toll on the industry, which saw dozens of breweries and pubs shut down shop from last year.

Industry bodies, which have long been campaigning for relief, called for greater reform to the excise system, with one warning savings may not be passed onto the consumer.

Independent Brewers Association chief executive Kylie Lethbridge said foreign brewers largely dominate the domestic market, so Australian-owned brewers would not benefit as much from the freeze.

"The fundamental problem for the consumer is that it's not going to make beer cheaper where we have some of the most unaffordable prices for beer in the world," she said.

Lethbridge blamed the tax framework, which she said was one of the highest in the world and needed to be reviewed.

"It's antiquated. It's not doing its job, necessarily, of minimising harm reduction by a tax from consumption," she said.

Brewers Association of Australia chief executive Amanda Watson said that while the freeze was good news, she would continue working towards future excise reform.

"This excise freeze is great news for Australia's pubs, clubs and beer drinkers and is a positive signal from government in terms of getting on with the job of delivering on pre-election commitments," she said.

Distillers, who are also hurting from rising costs, urged the government to expand the freeze to include spirits.

"It penalises a drinker who prefers a gin and tonic over a beer," Australian Distillers Association interim general manager Cameron Mackenzie said.

"It's a two-tier system, and spirits are already taxed two-and-a-half-times higher per standard drink than beer.

"It is unfair and it needs to be addressed."

25 July, 2025