Josh Frydenberg

Drinks industry calls for excise freeze

June 22, 2020
By Alana House

The drinks industry has joined together to call on the Australian government to impose a temporary alcohol excise freeze.

The Australian Hotels Association, the Brewers Association of Australia, Australian Grape and Wine, Clubs Australia and Spirits and Cocktails Australia say the freeze would help the sector recover from COVID-19 lockdowns.

Hundreds of thousands of jobs have been lost in the hospitality industry during COVID-19 restrictions. The latest CPI-linked increase in alcohol excise comes on August 1, just as venues around the country are reopening.

Brett Heffernan, chief executive of the Brewers Association, said total beer sales in Australia were down 44% in May compared to May last year.

“With more and more Aussies out of work and everyone counting their pennies, jacking up beer tax would be another blow to punters and publicans, alike,” Heffernan said.

“The price of a beer in Australia is already over-the-top. Tax accounts for 42% of the price of a stubby. On a typical $52.00 carton, $22.05 goes to the taxman. When it comes to taxing a drink, Aussies pay the fourth highest beer tax in the industrialised world.

“We’re not asking for a tax cut at this time … just don’t increase the tax. That would spare punters further pain, take pressure off hospitality venues and, because it’s revenue neutral, won’t cost Treasury a cent.

“Putting up the tax in August would be another hit to pubs, clubs and the hundreds of thousands of Australians they need to re-employ once they can re-open in full. Higher taxes will only make that challenge harder when so many are on their knees.”

Earlier this month, Treasurer Josh Frydenberg (pictured main) was photographed serving beers at a Victorian pub. He noted on Facebook: “Cheers! Fantastic to pour beers at the The Glenferrie Hotel with restrictions easing & pubs now open in Victoria. This is good news for jobs, businesses & economic activity.”

While wine is taxed differently and does not face the same excise regime. Australian Grape and Wine supports the push for an excise freeze.

“I think the critical issue is that for Australia to recover, we need the pubs, clubs and restaurants sector to recover as well, because that’s a major contributor to Australia’s economy,” said Tony Battaglene, the group’s chief executive.

Call for wine equalisation review

In addition to an excise freeze, there have been suggestions that the wine equalisation tax, which is a 29% tax on the wholesale value of wine, be decreased.

Restaurant and Catering Association also wants regulation changes such as the opening up more outdoor spaces for restaurants to use and the removal of the fringe benefits tax on business lunches.

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“I think that people don’t realise how much of the actual price they pay for that glass of wine and that plate of food actually goes to the Government,” Melbourne restaurant Movida’s co-owner Frank Camorra (above) told ABC News.

“For a long time, restaurants have been a great way for the Government to increase revenue.”

He added: “If the CBD doesn’t increase in foot traffic and people working in the city by the end of September, I would find it very difficult to think we could be viable without JobKeeper.”

Restaurant and Catering estimates 10% of hospitality businesses have already closed permanently due to COVID-19.

It believes if government support is withdrawn in October as planned, that figure could rise to 20 per cent within months.

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