Call to cut tax on beer

AUSSIE brewers forced to tip out 20 million schooners of beer during the COVID-19 lockdown are calling for a tax freeze to make a drink at the pub more affordable to keep venues afloat.

Coopers, Lion and Carlton & United Breweries have joined forces to ask for a cut or freeze of the excise on beer sold in the nation’s venues in the wake of the pandemic.

At the start of the lockdown

Jen Rounds at The Fortune of War pub in Sydney.

Lion had to dump 4.9 million schooners of beer in keg returns from NSW pubs alone, with sales yet to return to normal levels.

Despite losing its premium product, Lion was able to salvage some value by tipping the beer through a wastewater treatment plant able to generate biogas used to fire up breweries’ boilers.

Excise accounts for about $17.32 of a $52 carton of beer with 4.9 per cent alcohol, with the government netting about $2bn in revenue from it in 2018-19.

Brewers Association of Australia chair Peter Filipovic said COVID-19 had significantly affected the hospitality sector, which was the brewing industry’s biggest customer.

“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,” he said.

“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.”

Excise on beer costs $51.31 per litre of pure alcohol for bottled products and $27.59 for kegs.

With higher production costs for packaging of bottled beer, kegs already have a better margin for publicans, so if the excise was dropped it would enable many to keep staff employed until customers return to normal levels.

Owner of the Fortune of War pub in The Rocks Stephen Speed said a freeze or cut to the beer excise would ease pressure on razor thin margins and help them keep afloat.

“Every little bit makes a difference,” he said.

“At the moment we’re trading about 30 per cent of preCOVID revenues and not all of our staff qualified for Jobkeeper so our wage bill is still very high.”

Mr Speed said while weekend and lunch time patronage was slowly gaining, the impact of the shutdown was still significant.

“At night time from Monday to Thursday the pub’s a near non-event,” he said.