Craft brewers and beer lovers will be among the winners of next week's federal budget with the tax rate applied to smaller kegs set to be phased out.
Currently, a two-tier tax system means draught beer sold in 50 litre kegs are currently taxed at $34 a litre, while beers in kegs under 30 litres are charged $49 a litre.
"This is unfair for smaller brewery businesses," Treasurer Scott Morrison said in a statement this week.
The federal budget will extend concessional draught beer excises to smaller kegs, and increase the amount beverage companies can claim back.
Alcohol manufacturers can currently claim a refund of 60 per cent in the excise duty paid on beer and spirits of up to $30,000 a year.This will increase to $100,000 from 1 July next year, and apply to all brewers and distillers for the first time.
"This not only champions the craft brewers that we've all grown to love, it raises a very tantalising prospect for Australians: the likelihood of cheaper craft beer," Morrison said.
"These brewers are predominantly small businesses and could benefit both from the increase to the excise refund cap and extended access to the concessional draught beer excise rate."
According to the Chair of the Independent Brewers Association Ben Kooyman, Australia’s 450 small, independent brewers will take that additional excise rebate and invest it back in their businesses.
"That will mean they will be able to increase their production, invest in quality improvement and most importantly hire more staff to join over 2400 Australians the industry already employs.”
“A reduction to the excise rate on smaller kegs has the potential to fundamentally change the way many of our members do business. It will allow them to win customers in smaller venues and in distant markets. And having to deal with full 50 litre kegs is one of the biggest workplace health and safety issues in many breweries. This will give brewers more options.”
