Pubs are asking the federal government to dramatically slash the tax on draught beer to ease the burden on inner-city watering holes that have been smashed by coronavirus lockdowns and restrictions during the past 12 months.
The Brewers Association, which represents Australia’s most popular brands, wants the tax levied on a keg of beer cut by 50 per cent in next month’s federal budget, arguing it would offer relief for many debt-ridden publicans who are trying to regain the massive losses from their businesses.
Draught beer is categorised as beer packaged in an individual container exceeding 48 litres and can be sold on tap in pubs and clubs. It has three different excise rates that apply according to whether it is low-strength, mid-strength, or full-strength beer. A typical full-strength keg is taxed at $36.14 per litre of alcohol in Australia, where we pay the fourth-highest beer tax in the industrialised world.
John Preston, the chief executive of the Brewers Association, said for a small-to-medium sized pub, which buys around 15 kegs a week, a reduction of 50 per cent in the excise rate on draught beer could mean a $465 saving in beer tax each week.
It is estimated that tax reduction would cost the federal budget $150 million out of total current beer tax revenue of $2.5 billion.
He said each venue owner could then decide whether to use the savings to entice customers back through promotions or pay down debt to help them remain viable after mandatory closures due to lockdowns and other restrictions such as capacity limits.
“A 50 per cent reduction in the excise rate on draught beer would deliver a massive boost to hospitality business owners at a relatively small cost to the government. Beer anchors pubs and clubs, and these businesses need a break.”
He said given more than 85 per cent of beer consumed in Australia was made in Australia, reducing beer tax should also be a priority to support the 100,000 jobs that rely on brewing and the hundreds of millions of dollars of produce sourced from Australian farmers.
Michael Burke, who owns the Belgian Beer Cafe in Melbourne said he had to let two staff members go during the extended lockdown.