Craft beer crisis as taxes set to rise again
If there’s one thing (albeit not the only thing) raising Australia’s inflation figures, it’s the price of beer.
The ludicrous cost of a pint, pot or schooner of beer, due to taxes, is crippling the craft brewing industry while also putting a basic brew out of the reach of the average punter.
And the pain is set to get worse.
Ahead of International Beer Day next Friday, the latest beer excise rise will be calculated and take effect on August 5. Rate rises have totalled more than 17 per cent since early 2020.
Craft brewers are at breaking point over the tax, which is the third highest in the world and continues to rise every six months.
“There comes a point where you can't continually absorb that and then you try and pass it on to the punters and you're losing business,' Perth craft brewer Travis Moore told the Daily Mail.
The Independent Brewers Association (IBA)’s call for a 12-18 month freeze on the excise has fallen on deaf ears, with no relief in this year's federal Budget.
“So we're now calling on our consumers not only to look for the 'Certified Independent' seal when they're purchasing their next beer but to reach out and to tell our government they want their beer to be cheaper,' chief executive Kylie Lethbridge said.
Moore has pointed the finger squarely at the major players saying the 'two big boys are locking out the rest of the breweries in the country'. He is referring to Kirin-owned Lion Group and Carlton United Breweries, which is owned by Asahi, with those two alone accounting for up to 85 per cent of all beer brewed in Australia.
Lethbridge said the major brewers were pushing independents out of venues.
“We're now having to compete with supermarket beer on tap as well,' she said.
“You're seeing some of Dan Murphy's brands go to keg and these home brands who are on the shelf at a much lower price point than ours.”
The IBA plans to make a formal submission to the ACCC requesting an investigation, while the House of Representatives' economics committee found Lion and CUB were able to exercise 'enormous market power' in Australia.
Still, nothing has yet been done to ease the burden on Craft Beer breweries, which is being further impacted by the cost-of-living crisis and reduction in discretionary spending.
“People are still going out but spending a lot less than what they traditionally would,' Moore said.
With around 700 craft breweries in Australia, the market is worth $160 million and contributes $1.93 billion to the economy, directly employing about 10,000 people. This particular industry has grown 80 per cent in eight years.
However, it is now struggling and is calling for respite.
'Just to give everyone a chance to breathe, to give the price of beer a chance to breathe and allow us to get through a tough time with the economy,' Moore said.
Due to rising costs, the industry has lost 25-30 breweries in 12 to 18 months.
The IBA is expected to take the issue to the federal election next year.
Jonathan Jackson, 29th July 2024
