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Latest alcohol excise rise looms

Latest alcohol excise rise looms

The next indexation of alcohol excise rates will take effect throughout Australia next week.

Increased rates kick in on Monday, August 5, 2019, due to CPI indexation figure published on July 31 2019.

For example, spirits will increase from $85.36 to $85.87 per litre of alcohol. 

Spirits & Cocktails Australia is calling for a freeze on the "spirits super tax".

"The spirits super tax is inflating prices, quashing innovation, squeezing margins and limiting the industry’s growth potential," it notes. "Without a competitive tax rate the spirits industry is being held back from achieving its full potential both at home and abroad."

Earlier this year, Four Pillars Gin founder Stuart Gregor described Australia's taxation on spirits as "the most punitive in the Western world".

"We've had 11 tax increases since we started Four Pillars," he told the Australian Financial Review.

Four Pillars is cheaper to purchase off the shelf in America, the UK and New Zealand than in Australia, even after accounting for shipping costs.

Click here to access the full list of increases. 

Shake-up to beer excise laws

The refund scheme for alcohol manufacturers has increased, which means manufacturers may be able to claim a refund for 60% of the excise duty paid from July 1, 2019, up to $100,000 per financial year.

To be eligible you must:

>> have manufactured an alcoholic beverage and paid excise duty on it

>> have fermented or distilled at least 70% of the alcohol content by volume of the alcoholic beverage

>> hold a manufacturer licence authorising you to manufacture alcoholic beverages

>> be legally and economically independent of any other entity that has received a refund under the scheme (if you're not legally and economically independent of any other entity, only one manufacturer in your group is entitled to the refund).

IBA Chair, Jamie Cook said the increase to the excise refund cap will provide independent brewers with up to $70,000 more in capital to use on people, plant and equipment and also breaking into the market.

“The changes should result in a direct increase in employment, capacity and quality, allowing Independent Brewers to continue to supplement their communities, stimulate the economy and continue to disrupt a highly concentrated market,” he said.

The excise tariff laws that lower excise duty rates for beer in containers larger than 48 litres will now cover smaller containers of 8 litres or more.

Assistant Treasurer Stuart Robert said: "Currently, draught beer sold at pubs, clubs and other licensed venues from kegs exceeding 48 litres is taxed at lower rates compared with beer sold from smaller kegs. Extending the concessional draught beer excise rates to kegs of 8 litres or more will allow craft brewers producing smaller quantities of beer to benefit from the lower rates. This measure levels the playing field between small brewers and large brewers."

Growlers and repackaging update

From July 1, entities will need to apply for a licence to manufacture alcohol if they decant beer (that has had excise duty paid on it at a concessional rate) into sealed containers:

>> between 8 and 48 litres (inclusive)

>> that aren’t designed to connect to a pressurised gas delivery system, pump delivery system or other prescribed system.