Levelling the playing field for craft brewers and distillers

| May 5, 2018

Craft brewers and distillers will no longer pay additional tax, allowing them to compete on fairer terms with large beverage companies.

As part of our commitment to unleash the potential of Australian small businesses, the Turnbull Government will increase the amount beverage companies can claim back on their excise and extend the concessional draught beer excise rate to smaller kegs, typically used by craft brewers.

The alcohol excise refund scheme cap will increase from $30,000 a year to $100,000, from 1 July 2019 for all brewers and distillers.

This additional tax relief, on top of the Government’s legislated tax cuts for small and medium businesses, will allow craft brewers and distillers to compete on fairer terms with large beverage companies.

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.

The extra help to craft brewers and distillers will drive competition in a sector currently dominated by large domestic and multinational brewers, opening the door to new products and will likely put downward pressure on prices.

Currently, draught beer sold in kegs exceeding 48 litres is taxed at lower rates compared with beer sold in smaller kegs. This is unfair for smaller brewery businesses. Extending the concessional draught beer excise rates to kegs of 8 litres or more will level the playing field for craft brewers, which typically use smaller sized kegs, to distribute their beer to pubs, clubs and restaurants.

There are around 380 craft brewers in Australia located across each State and Territory, employing the equivalent of almost 2,400 people. 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.

There are also over 100 domestic distillers, supporting around 1,600 jobs that could benefit from the changes.

This measure adds to the Turnbull Government’s support for small business over successive Budgets, including: an increase to the turnover threshold for access to the small business concessions, reduced tax rates and the $20,000 instant asset write-off.

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Scott Morrison

Scott Morrison was elected leader of the Liberal Party and Prime Minister of Australia in August 2018.  He was first elected as the Federal Member for Cook in November 2007 and became the Minister for Immigration and Border Protection in 2013. After serving as the Minister for Social Services. Scott was appointed Treasurer in September 2015.