Brewers launch call to reduce beer tax in pubs and clubs

The Brewers Association has today called for a reduction in the tax paid on beer in pubs and clubs to help support Australia’s hospitality sector. Launching the Brewers Association Pre-Budget submission today the CEO, John Preston, said:

“A significant cut in the beer tax bill for pub and club owners and their customers will help the hospitality sector as they cope with the ongoing impact of mandatory closures due to lockdowns and other restrictions such as capacity limits.

“A 50 per cent reduction in the excise rate on draught beer would deliver a massive boost to hospitality business owners at a relatively small cost to the Government. Beer anchors pubs and clubs, and these businesses need a break.

“Beer tax in Australia is the fourth highest in the developed world. Given more than 85% of beer consumed in Australia is made in Australia reducing beer tax should also be a priority to support the 100,000 jobs that rely on brewing and the hundreds of millions of dollars of produce we source from Australian farmers.”

The submission also states that if the Government is unwilling to cut the excise on beer it should, at the very least, freeze the rate where it is at the moment and stop the current automatic increases every six months.

The Brewers Association also supports the call from the Independent Brewers Association in their submission to increase the brewers’ rebate from $100,000 to $350,000 per annum.

For a small to medium sized pub which buys around 15 kegs a week a reduction of 50 per cent in the excise rate on draught beer could mean a $465 saving in beer tax each week. Each venue owner could then decide whether to use this money to entice customers back through promotions or pay down debt to help them remain viable.

Our modelling has found that a 50 per cent reduction in beer tax applied to draught sales would cost the Government $150 million out of total current beer tax revenue of $2.5 billion.

Beer sales anchor pubs and clubs in Australia and new industry sales data for 2020 has shown the enormous impact COVID19 has had on the hospitality and brewing sectors.

  •   This data has shown a massive drop of 30 per cent in draught beer sales compared to the previous year. This represents a drop in beer sales by pubs and clubs last year of just over $1 billion – a devastating loss for the hospitality and brewing sectors.
  •   Overall beer sales across both the hospitality and retail sectors (i.e. through bottle shops and pubs and clubs) were down for this period by 2.6 per cent.
  •   These figures clearly demonstrate the impact of lockdowns across Australia on pubs, clubs and the brewing industry with staggering falls in sales volumes through pubs and clubs of 94 per cent and 96 per cent for April 2020 and May 2020.
  •   The cost to Australia’s several hundred brewers, big and small, from the lockdowns has been huge. As a perishable product beer that had been produced and was ready in kegs to be shipped to venues had to be destroyed when these venues were closed. Overall, 373,500 kegs had to be tipped with the costs borne by the sector. That’s around 44 million schooners in lost sales to the brewing industry and our hospitality sector.