Yahoo Finance Major warning for Aussie pubgoers as beer prices set to rise again: 'Really bad news'
The industry is about to receive confirmation about how much the beer excise duty rate will go up.
Aussies have just a few weeks before they will have to start paying more for beer at the pub and bottle shops around the country. Excise duty rates for alcohol undergo a twice-yearly update based on the movement of the consumer price index (CPI).
This has caused Australia to have the world's third-highest beer tax after Norway and Finland, and puts major pressure on breweries, pubs and customers. Brewers Association of Australia CEO John Preston told Yahoo Finance this will have a "big impact" when it kicks in next month.
"The hospitality sector is in crisis," he said. "We've heard about bars, cafes, restaurants, pubs, and what they're going through... they're really struggling.
"This excise tax, they've got to pay it or they've got to try and pass it on. It's really bad news for pubs and clubs and for beer drinkers."
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How does the beer excise tax work?
Every year, the excise on beer and other types of alcohol gets updated twice, once at the start of February and again at the start of August.
At the moment, for beer with alcohol above 3 per cent in an individual container less than eight litres, the tax is $60.12 per litre of pure alcohol, and pub beer tax is $42.37 for beers over 3.5 per cent.
"For beer, it also depends on the size and design of the container you package it in and if you produce it in commercial premises or a brew-on-premises shop," the ATO said.
The CPI data will be published at the end of July and the updated excise will be implemented on August 5.
The update after that will come in on February 3.
How much will it be going up in August?
The Australian Taxation Office told Yahoo Finance that "any increase in the excise duty rates cannot be calculated until the CPI is determined and published by the Australian Bureau of Statistics".
This means brewers and pubgoers will have to wait until July 31 before they are told how much deeper into their pockets they'll have to go.
Preston explained the excise rate is usually half of whatever the inflation rate is.
"Each individual increase, it's not a massive jump, but it does make a difference, and it just cumulatively adds up to a big impact on for punters," he told Yahoo Finance.
"I think for a slab of beer now, you pay about $25 in tax and GST. So it's about 40 to 45 per cent of the retail price, which is huge."
Can the government stop beer from going up in price?
The Brewers Association has been campaigning for the government to step in and stop draft beer from being included in the twice-yearly price update.
Anthony Albanese was asked earlier this year about whether he would do anything on the issue, but said his government was looking at other ways to help Aussies.
“We are not looking at that at the moment, but obviously in the lead up to budgets, you have submissions and I’m sure that there’ll be submissions along a whole range of ways," he told 3AW.
"One of the things that we have to do though, is look at ways where we provide cost of living support, whilst putting downward pressure on inflation.”
Preston said they will keep up their pressure, especially when Aussies are already doing it tough in a cost-of-living crisis.
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