Stop the spirits tax before cocktails reach $50

Australia’s spirits, bar and night-time industries are calling on the Federal Government to take action and freeze the biannual spirits tax rise, before cocktails become too expensive and more hospitality venues are forced to close their doors.

Last week the Government announced its two-year freeze on draught beer excise will now come into effect from August 1, meaning the scheduled excise increase on beer for Wednesday, 4 August will not happen. The excise increase will go ahead on spirits and RTDs, a move which has many across the industry calling for parity from the Government.

Sydney bar owner Dre Walters said: “Excise relief on tap beer is great, it’s a first step in the right direction, we can do more though. We can make it fair for everyone. It’s not just a tap beer drinker, what if someone wants that bottles beer, or they want a gin and tonic or an RTD, I think it’s only fair to pass it on to everyone.

“To operate any hospitality business in Australia is hard, and having something increase twice a year is a huge burden, and it’s something that you can’t control. We’d love to see the Government share the excise hold on spirits, RTDs, everything. There is no reason why it shouldn’t be fair for everyone drinking.”

Dre also said that with the biannual increase he has to have tough conversation about what it means for the business.

“I’ve got to have those serious conservations with my wife, my business partner about, ‘do we continue?’ We’ve been doing some forecasting and I five years it’s going to be $35 for a cocktail. That’s not us charging, we’re doing that so we can pay staff, we can pay rent and you forward that to 10 years and we’re looking at anywhere between $45 to $50 a cocktail, which is quite unreasonable.”

The calls to freeze spirits excise are not limited to bar operators, Mick Gibb, CEO of the Night-Time Industries Association, called on the Government to match what it has given draught beer and freeze spirits excise as well.

“Excise relief shouldn’t be dictated by whether you have a draught beer or a Margarita. You should be able to get the same sort of relief, regardless of what you drink. That’s all we are asking from the Government, to match the excise relief given to draught beer to spirits as well. It’s a very modest ask.

“This is something that will support the industry, support small businesses, and help people come back out at night. Spirits excise in Australia is one of the highest in the world, and that means that we’re at a competitive disadvantage to other countries, particularly for these small business owners and for our already thriving bar scene.

“Imagine if we took that handbrake off. Imagine what we could accomplish if we started to enable these small businesses, these world leading small bars, to thrive without this consistent pressure of an exercise increase every six months that it’s huge opportunity for small bars.”

Australiaʼs punitive spirits taxation regime means consumers pay one of the highest tax rates in the world for spirits and RTDs. The tax on spirits is already $104.31 per litre of alcohol before next monthʼs excise increase.