A report released by the Independent Brewers Association shows there are more breweries operating today than any other time in Australia’s history.
Independent brewers are generating $740 million in annual economic output, with a total of 379 independent brewing businesses across Australia in 2015/16.
“On a national basis, the independent brewing sector supported an estimated 2390 full-time equivalent (FTE) jobs in 2015/16,” says the report, prepared by Melbourne consultancy Essential Economics.
“A further 17,210 FTE jobs are supported indirectly in the local and wider economy through the activities of the independent brewing sector.”
The report found that 65% of independent breweries are located outside of capital cities, with Victoria emerging as the nation’s craft beer capital, hosting more small brewers than any other state.
Of the 379 brewers, 116 were located in Victoria, NSW came next with 101, followed by Queensland with 45.
IBA launches excise campaign
Independent brewers paid approximately $74 million in alcohol excise duties in 2015/16, the report noted, leading the IBA to launched a campaign today asking the Federal Government for a fairer tax system.
Independent Brewers Association chief Chris McNamara (pictured above) has told the Herald Sun that high and complicated excise duty arrangements are hampering the sector’s further growth.
Current excise rates were the key constraint to growth identified by breweries on an industry-wide basis, with 53% of survey respondents identifying this factor.
For example, beer sold in a 30-litre keg, the favoured size by boutique brewers, is charged a higher excise rate than that sold in a 50-litre keg.
The association is pushing the government to simplify the excise regimen on beer and give small brewers similar tax breaks as those granted to wineries.
“That will allow our members to hire more people and invest in building up their business,” McNamara said.
Excise reforms explored in the report
The report points to possible reforms to benefit the industry, such as:
>> Increasing the brewery tax refund, to allow operators to reduce costs and reinvest in their business
>> Indexing the brewery tax refund to ensure the refund aligns with increases in excise rates
>> Extending the excise settlement period to allow business to better manage cash flow
>> Lowering the excise rate on 30 litre kegs, which will improve workplace health and safety outcomes, reduce shipping costs and allow greater flexibility in supplying smaller hospitality venues.
Ministers join the call for action
Last month, Federal MP Anthony Albanese (pictured above with Inner West Brewers Association) introduced a bill to Parliament calling for an update on policy, excise and planning rules to boost the craft brewing industry.
Albanese said: “I do so in support of those Australians who are currently employed by the more than 400 craft brewers around Australia. The craft brewing industry is a job creation powerhouse, but if we get the policy settings right it could generate even more jobs not just in our capital cities but also in our regional communities.
“Craft beer is a quality product; however, the industry has been restricted by outdated planning controls and development approval processes at the state and local levels, and this resolution calls for local and state governments to provide support to the craft brewing sector.
“But the fact is it is also disadvantaged at the federal level by poor legislation related to the excise rates faced by small brewers. Today the rate of the federal excise charged for a keg containing 50 litres of beer is less than the rate charged for a keg containing 30 litres.
“In addition to this, a maximum tax rebate a brewery can receive per calendar year is $30,000, which compares unfavourably to the wine industry’s producer rebate of some $500,000.
“These anomalies put Australia’s craft beer brewers at a competitive disadvantage against mass produced beers. With excise making up approximately 40% of operating costs for most craft breweries in Australia, this has to change.
“If the government is serious about supporting small business in Australia then it needs to get serious about changing the legislation to help our brewers. Despite the obstacles faced by the industry it continues to expand, and the type of kick-on employment that the sector supports, such as boutique hops growers, is vital to a healthy and diverse national economy.
“With proper support from the federal government, the potential for growth is enormous. Already, major regional centres, like Ballarat, Wagga Wagga, the Hunter, the Illawarra and in Tasmania—including Scottsdale, where I visited the brewery there—have seen growth in local jobs, with people being employed and local communities being able to gather.
“I certainly have respect for the resilience and success of the craft beer-brewing industry. I have respect for the sector’s contribution to the national economy. And I have respect for the fact that local breweries employ local people.”
