Duopoly and tax pushing beer to unaffordable levels
Beer taxes have increased the price of beer to beyond affordable levels, with tourists in Sydney calling out the high charges. However, it’s not just taxes, that are pushing prices higher.
One tourist talk to Reddit to exclaim disbelief, sharing a photo of a $17.90 beer, including a 15% surcharge, bought at the Harbour View Hotel in The Rocks.
“$20 pints are just around the corner,” he captioned the photo.
“Who can afford this? This is partly what’s ruined the nightlife in the city,” one social media user wrote.
“Stopped drinking two years ago. I honestly don’t know how people can afford to go out drinking on a regular occurrence,” said another.
“I paid $40 for 2 pints the other day (of bloody Peroni). I almost had a heart attack when the notification popped up, and it honestly killed the buzz for the rest of the evening. Absolutely insanity,” a third said.
Higher costs could be attributed to Australia’s foreign beer “duopoly” – behind VB and Toohey’s which has been accused of freezing out small, local brewers from pubs.
Carlton & United Breweries (CUB) was acquired by Asahi in 2020, while Lion, formerly Lion Nathan, was acquired by Kirin in 2009. Combined they account for around 80 to 85 per cent of beer sales in Australia.
Independents are unable to compete with the giants in what has been called “anti-competitive” behaviour.
Large breweries are accused of offering cash rebates and other incentives including furniture fit-outs to stock their beer.
The competition regulator dismissed the notion of anti-competitive behaviour in 2017, however as small brewers have doubled in number from 350 to more than 600 the issues has worsened.
A parliamentary inquiry into competition in 2023 found that profit margins on beer came in at up to 40 per cent in Australia and Australians paid some of the highest prices in the world.
Back in 2016, the average price for 500ml of beer was just $7.90 according to the World Health Organisation. In the US it was $4.37 and in the UK just $5.54.
Profit margins and taxes are having a major impact. Australia’s beer excise is $59.06 per litre of pure alcohol – the third highest in the world.
Jonathan Jackson, 12th October 2023
