Published on Jul 4, 2017
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Hunter Valley craft beer tax battle brewing
Boutique home-brewed craft beer producers at Hunter Valley Beer Co, Lovedale Brewery, Hope Brewhouse and Ironbark Hill Brewhouse are being discriminated against by a cost-prohibitive and outdated tax system. This persists despite a burgeoning craft and boutique beer market and a plethora of fresh brewing businesses supporting the economy.
Member for the Hunter, Joel Fitzgibbon has told federal parliament the current tax arrangements are unfair for craft beer businesses. This comes, as Mr Fitzgibbon and Labor colleague Anthony Albanese lodged a private members’ motion in June to initiate processes to change policy in order to support our craft brewers to grow their business.
Keith Grice from Nulkaba’s Hunter Beer Co. says the current taxation system is outdated and not keeping pace with the market. In Australia, beer is still taxed under a two-tier system which favours larger producers.
“There is no doubt that the current taxation process makes it challenging to run a profitable small scale brewery”.
Smaller breweries are more likely to use smaller packaging such as cans, bottles or smaller kegs. These currently incur an excise of $48.57 per litre of alcohol as opposed to beer sold in bulk, the larger 48.5 litre kegs which incur only $34.21 per litre.
“Excise accounts for almost half the cost of draught beer and about a third of the cost of packaged beer.”
Andrew Drayton from Ironbark Hill Brewhouse believes that the outdated tax system is leaving Hunter breweries behind.
“It’s hard not to feel disheartened by the higher costs of excise when we are trying to run a small business that not only employs locals but also boosts the local economy”.
At present, small wineries can claim up to $500,000 in Wine Equalisation Tax rebates in order to remain competitive against large bulk producers. Breweries can only claim $30,000 of their excise back as a rebate.
Council’s Economic Development Unit has spoken to local craft breweries who would welcome policy reviews on beer tax. Positive policy change for our craft brewers could introduce a flat rate excise for any sized container for craft beer.
Michael Hope from Hope Brewhouse agrees that current beer taxation is not supportive of smaller craft breweries. He contends that excise dollars could be better spent to support beer’s contribution to regional tourism.
“Independent craft breweries are at a severe disadvantage when competing against the major breweries. Any reduction in excise payable on retail sales would allow us to spend more on tourism infrastructure and marketing.”
Tax changes and incentives for small breweries could support business growth, employment outcomes and ultimately strengthen beer’s contribution to our visitor economy.
Promoting Beer Tourism in the Hunter Valley
In order to celebrate hand-crafted locally brewed beers and highlight the emergence of this popular tourism product in the Hunter Valley – the Cessnock Chamber of Commerce have launched a beer trail brochure in partnership with local breweries.
Launched at the Cessnock Stomp Festival in 2017, the Hunter Valley Beer Trail brochure showcases handcrafted and authentic Hunter breweries including Hunter Beer Co., The Lovedale, Hope Brewhouse and Ironbark Hill Brewhouse. The brochure welcomes visitors to ‘Hunter Valley Beer Country’ through the self-guided beer trail. This type of initiative promotes new markets and highlights that our region is diverse.
You can collect a copy of the Hunter Valley Beer Trail brochure from the Hunter Valley Visitor Centre. Download a copy of the Beer Trail brochure, or read more at the Hunter Valley Visitor Centre website.
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