Cheers to lowering tax burden on craft brewers

Cheers to lowering tax burden on craft brewers

Federal Member for Mayo Rebekha Sharkie is looking forward to sharing a beer with craft brewers in her electorate to celebrate a new law that removes the higher tax on smaller kegs and creates a fairer market for big and small beer producers.

After two years of advocacy by the local MP, the Excise Tariff Amendment (Supporting Craft Brewers) Bill 2019 was passed by Federal Parliament this week, extending the concessional draught beer excise rates to kegs of eight litres or more.

The new streamlined excise regime means craft brewers are not dissuaded from using one-way plastic 30-litre kegs that open up markets to smaller venues, reduce the cost of stolen kegs and reduce workplace health and safety concerns about handling heavy kegs.

“I have been working on this issue since Corinna and Frank from the Prancing Pony Brewery in Mount Barker approached me in 2017 to talk about the challenges holding back their award-winning boutique business,” Rebekha said.

“There are many taxation and red tape issues facing this burgeoning industry that need to be examined but the higher rate on smaller kegs was such an obvious anomaly I made it my primary objective to level the playing field and began lobbying the Government.

“Persistence, reasoned policy and the advocacy of other MPs who could see the sense in this simple change has finally paid off.

“Mayo is a hotspot for craft brewers and they are important in growing the tourism industry for us in our region where they complement the reputation we have for producing fine wines, ciders and spirits.

“This new legislation will hopefully give our small brewer greater market access and greater returns to invest back into their businesses.”

According to the Independent Brewers Association, there were 547 craft brewers recorded in Australia as at June 2018, up from 380 in 2016.

More than 50 of them are in South Australia and many of them are located in the Adelaide Hills, the Fleurieu Peninsula and Kangaroo Island.

Until this latest legislation was passed, the excise for a 50-litre keg of beer containing 3.5 per cent alcohol by volume was $34.21 per litre compared with $48.57 for a 30-litre keg.

The $14.36 cost difference encouraged craft brewers to use the bigger vessels to keep costs down.

This led to workplace health and safety concerns because the standard 50-litre kegs can weigh up to 65 kilograms, and they are often manually handled during delivery.