Spirited campaign to lower excise tax
HIGH excise tax is unfairly penalising the spirits industry, according to a Bellarine distillery that says it may even curb its expansion plans.
Excise duty is applicable to excisable goods, namely alcohol, tobacco and fuel manufactured and sold in Australia.
Bellarine Distillery and The Whiskery owner Russ Watson said high excise tax on spirits coupled with twice yearly indexation had the potential to derail its expansion plans.
While the State Government provided grants to growing breweries and distillers, Mr Watson said the Federal Government was “ripping the skin off our backs”.
“We’ve got expansion plans to create something that could really be quite a tourist attraction, but they’re (Federal Government) going to choke it to death,” Mr Watson said.
“If there’s no ceiling put on it, it has the potential to drive us out of business eventually.”
This year Australia’s alcohol tax regimen updated the excise duty rates on beer in a blow to boutique brewers.
From July 1, beer packaged in kegs between eight and 48 litres is subject to the same rate of duty as beer packaged in the standard keg size of 48 litres.
Mr Watson said taxation on pure ethanol was $85.87 a litre, which had the potential to kill the industry.
“The cruel part about it is it goes up every six months for CPI and there’s no ceiling,” Mr Watson said.
“Effectively they want to price people out of enjoyment and price us out of business.
“We can’t pass that on to our customers every six months, we have to absorb it, so it makes it more and more expensive for us to exist.”
Mr Watson, who employs six full-time staff at the Drysdale distillery and up to 14 people on weekends, said he would like to see more excise tax returned to the spirits industry.
Excessive excise tax also unfairly favoured imported products over homemade, he said.
“The reality is I can still go to Aldi and buy an imported bottle of gin for $40,” he said.
“The only people they are hurting are the people in local industries that are creating employment, and in our case, creating a tourist attraction that draws people from all over and bolsters the local economy.”
Treasurer Josh Frydenburg said the Government was supporting Australia’s growing distilling industry.
“From July 1, 2017, the Government extended the excise refund scheme to distillers,” he said.
“Under the scheme, eligible manufacturers of alcoholic beverages can claim a refund of 60 per cent of the excise duty paid on the products.
“From July 1, 2019, the cap for this scheme was increased from $30,000 to $100,000.”