Yahoo Finance Pub owner reveals 'huge problem' behind extortionate beer prices as pint of Carlton Draught hits $18
Industry bosses fear pubs are now at significant risk thanks to gruelling pressures on owners.
A popular publican has explained why helpless pubs are stinging Aussies with prices of near $20 for a pint as attention returns once again to beer costs following yet another tax increase.
Matt Coorey fears Aussie pubs are now at significant risk as the bi-annual beer tax continues to punish the hospitality industry. Coorey, senior vice-president of the Queensland Hotels Association (QHA), told Yahoo Finance that, in the middle of a gruelling cost-of-living crisis, the beer tax is threatening many pubs at the heart of Australian communities.
"It's just so hard because if we don't go with [the tax increase] your margins erode and you're basically working for nothing and we don't do that," Coorey said. "We know with wages and electricity and all the other inputs that have gone up, you can't keep absorbing everything.
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"It's a big issue for regional and country publicans. They can't raise the price of a schooner with every CPI rise, plus wages, cost of goods. Cost of food is more out there as well. We've got to remember, out there, people are doing it tough. It costs more to get the beer to the places as well."
He said it "isn't fair" for Aussies who treated the pub as a clubhouse.
"People go to meet and go to offload their problems. It's about mental health, it's about a bloke who wants to call into his local and have two beers with his mates," the former Queensland publican of the year told Yahoo Finance, suggesting it just wasn't attainable for many now with schooner prices going up $2 in the past two years.
Publicans 'aren't just plucking $19 a pint out of the air'
The federal government’s excise on alcohol automatically rises twice a year - in February and August - and is determined by changes in the annual inflation rate, which is currently 4.1 per cent. From Monday, the tax on a pint will increase to 90c, according to the Brewers Association.
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While the latest excise has led to the realisation $15 is now a normal price for a pint of beer, prices well above that mark are becoming more commonplace. A pint of Carlton Draught at a Victorian steakhouse drew the ire of the internet this week thanks to its $18 price tag.
Coorey said while every venue was different, most charging higher prices often had extra outgoings, pointing to the furore surrounding a $19.40 pint being sold in Byron Bay in late 2022.
"Everyone went off their heads about it but, if you look at the fact of the matter, they've got to pay for staff to get on buses from surrounding places because they can't afford to live in the place where the pubs are," he said.
He said Noosa, on the Sunshine Coast, was another location with a "huge problem" with staff being unable to afford the area, meaning wages needed to be higher to retain workers.
"Operators are at their wits' end," Coorey said. "The reason it gets to these prices is the cost of input. They're not just plucking a number out of the air and going, 'I'm going to charge $19 for a pint'."
QHA chief executive Bernie Hogan told Yahoo Finance, "No one ever complains about looking after good staff but it will get to a point where the price point of where you put a drink on the bar for a new customer is beyond what the customer is willing to pay".
Hogan said, thankfully, he was not seeing evidence of pubs close to shutting up shop because of the financial pressures just yet, but "these are the pressures" that would eventually influence that decision.
Coorey said that, while he doesn't think the standard price of a pint will reach $20 in the next couple of years, it could easily happen a few years after if action isn't taken.
Industry fed up with lack of government action
There are now urgent calls for the tax rises to end to protect the industry and its customers.
Australian Hotels Association CEO Stephen Ferguson told Yahoo Finance that, while the Albanese government inherited the tax, it was their chance to end it.
"This government didn’t cause the problem, but it can freeze these rises during the cost-of-living crisis," he said.
Coorey said it was disheartening to "keep saying the same thing and not getting results", with previous pleas to halt the tax dismissed by the former Morrison government.
Finance Minister Katy Gallagher seemed content with the beer tax last week, reminding the industry the hikes were "normal". However, she did offer a glimmer of hope a change would be considered, in this year's federal budget.
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