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Craft brewers demand tax reforms

Craft brewers demand tax reforms

Australian craft brewers are calling for the Australian government to revise its "outdated" taxes on the industry.

Currently, brewers are taxed at about $34 a litre if their full-strength beer is sold in a 50 litre keg, but the identical beer in smaller packaging, such as bottles or more compact kegs, attracts an excise of $49 per litre.

"It's just crazy, it's outdated, it's from another era," Willie the Boatman brewery co-owner Pat McInerney told ABC News. "It should be just one levy across the whole spectrum of beer."

Craft brewers want to sell their product in smaller kegs to keep the beer fresher and allow bars to rotate their selection, but the tax discrepancy makes it uneconomical for them. 

"The fact that we are unable to sell a 30 litre keg at the same tax rate as a 50 litre keg is ridiculous," McInerney said.

He blames the prohibitive tax for preventing Willie the Boatman from expanding, as the company pays between $15,000 and $17,000 a month in excise tax alone.

Minister meets with craft beer representatives

Senior Labor frontbencher Anthony Albanese met with representatives of the numerous micro-breweries in his electorate - in Sydney's inner west - earlier this month.

"Some of the excise regime was written assuming there'd just be the big brewers," Albanese said. "This is a classic example of where the policymakers are behind what's actually happening in the economy and they need to catch up because breweries like this didn't exist just a few years ago."

The number of craft breweries in Australia has doubled in the past five years to more than 400 nationwide.  

Albanese said that while Labor was in opposition, he could still move a motion in the House of Representatives to raise the issues concerning the craft beer industry.

“They say politics is changing rapidly, so are consumer tastes. We all see the shift to craft beer and there’s an opportunity here to create significant employment opportunities," he said. 

“Oppositions can raise issues, but it’s governments that can make decisions,” he said.

Brewers call for tax rebate increase

Brewers are also campaigning for their annual tax rebate brought closer to the winemakers' rebate.

"That would not only grow the industry, it would grow every brewery, McInerney said. "It wouldn't go into our pockets, it'd go back into the business; on buying new stainless steel and on training new staff."

Wine producers can claim up to $500,000 annually under the Wine Equalisation Tax (WET) rebate scheme, while beer producers can only claim back $30,000 in excise a year.

Prior to the Federal election last year, The Craft Beer Industry Association noted: "The total increased cost of lifting the rebate cap to match that of wineries would be in the order of $15 million. This would benefit more than 150 of Australia’s craft breweries who would be able to reinvest these funds back into their business through equipment purchases, innovation and market development with the resultant creation of jobs.

"The budget papers highlighted that the proposed change to the WET rebate will save $300 million over 4 years. It is about time that a small fraction of those savings were used to afford small brewers the same opportunity for excise relief – and the consequent ability to invest in growth and in their regional areas – as our winery counterparts."



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