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Can cheaper beer fix Australia’s economy?

Will cheaper beer fix Australia’s economy? Source: Getty
Will cheaper beer fix Australia’s economy? Source: Getty

Cheap beer could be the key to stimulating Australia’s economy as it battles its first recession in nearly 30 years, according to three of Australia’s biggest brewers.

Cooper, Lion and Carlton & United Breweries have called on the Government to “make frothies affordable” nearly two months after the beer tax was introduced.

"We need to make a beer at the pub more affordable. It is as simple as that,” Brewers Association of Australia (BAA) chair Peter Filipovic said.

The tax on beer was hiked on 1 August, and increased every six months in line with the consumer price index. It now accounts for 42 per cent of a typical carton of beer.


"The tax on beer has gone up twice annually for the past 35 years forcing Australians to pay the fourth highest beer tax in the industrialised world,” Filopovic said.

"This has meant beer, the drink that brings people together, is less and less affordable for everyday Australians. It's not unusual for a single pint to cost $10 or more nowadays, whereas in the 1970s, a beer would set you back less than a dollar.”

Around 85 per cent of beer sold in Australia is made in Australia, with the brewers saying this means the industry is a huge driver of economic activity and domestic jobs.

“A cut, or at the very least, a freezing of excise will give hospitality businesses a chance to get back on their feet as beer is the most consumed alcoholic beverage in Australia's licensed venues," Filipovic said.

Even before Covid-19 hit, Filipovic said alcohol consumption in Australia was at 50-year lows, and he expressed concerns that the industry may never recover.

“There is a risk that Covid-19 will have caused permanent behaviour change meaning there is a reticence to gather in pubs and clubs,” he said.

“By cutting excise the Government has an opportunity to incentivise Australians to get out and about and support our vibrant, world leading hospitality industry.”

BAA has recommended the continuation of JobKeeper and a domestic tourism package tailored to assist Australia’s ailing hospitality sector.

The World Health Organisation has previously backed the alcohol taxes, saying it has several public health, economic and social benefits.

“They have the capacity to: 1) generate tax revenue, 2) reduce alcohol consumption and associated harms (covering both externalities and internalities) among various groups, including young people and heavy drinkers, and 3) prevent the initiation of drinking, which is an important preventive strategy in low-and middle-income countries that have a high prevalence of lifetime abstainers,” the WHO stated in a resource tool.

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