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Budget 2018

Important: The Budget Will Affect Craft Beer Prices

That’s right! 2012’s biggest trend has finally hit Canberra.

by Katherine Gillespie
09 May 2018, 1:34am

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This year’s Federal Budget, in the grand tradition of Federal Budgets, does not seem to care about young people all that much. No increase to Newstart, no extra uni funding, no measures to increase housing affordability. While things could be worse––never forget 2014’s Federal Budget, probably the most targeted government attack on The Youths in recent memory––they could also be way better.

There is one vaguely millennial-pleasing aspect of the Budget that stands out, however: the promise of slightly cheaper craft beer. That’s right! 2012’s biggest trend has finally hit Canberra. Your Federal MP recently grew a moustache and sipped his first Young Henry’s. He liked the taste. He thinks you might like it too.

See, in Australia, craft brewers are currently taxed at a higher rate than their Big Beer counterparts, simply because they supply their product in smaller kegs. Draught beer sold to clubs and pubs by the 50-litre keg is taxed at $34 per litre, whereas kegs of 30 litres or under are taxed at $49 per litre.

That’s set to change: every brewer supplying kegs larger than eight litres will now be taxed at the lower rate, with Treasurer Scott Morrison explaining in a media release that the discrepancy had proved “unfair” for smaller businesses. "This [new policy] 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," he said.

Another Budget measure is set to benefit breweries both big and small: a larger refund cap for tax duties paid on the sale of beer and spirits. Right now, alcohol manufactures can receive a rebate up to $30,000; that’s set to increase to $100,000. Quite a jump.

“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,” Morrison explained.

He’s probably feeling a bit smug, because tax concessions for craft breweries are actually kind of a Labor Party thing. Although the Treasurer is sacrificing a lot in the name of sticking it to Anthony Albanese; it’s estimated the tax breaks will lose the Federal Government $85 million in revenue over the next four years.

But that money is going directly to you and your mates at the pub, right? Well, maybe. Sadly, the Budget’s craft beer pricing revolution comes maybe five years too late.

Boutique beers have been popular in Australia for a while. So popular, in fact, that most of your favourites have already been bought out by larger companies. Furphy and Little Creatures? Owned by Lion, which your dad might know as the manufacturer of XXXX. Same with James Squire and White Rabbit. Four Pines and Matilda Bay are both owned by SAB, while indie-seeming brands like Four Pines and Pirate Life are products of Carlton United Breweries, who have made headlines in recent years for cutting employees' wages.

As Morrison points out, there are almost 400 craft breweries in Australia, and he hopes that 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.”

But according to an industry report released late last year, more than half of these 380 “craft” brewers are actually owned by large corporations. Big ones, too: Coca Cola Amatil recently purchased Western Australian craft brewer Feral, adding to a growing list of specialist beer brands that includes California indie favourite, Blue Moon. Even supermarkets are in the craft beer game now; every time you sip a Sail and Anchor, you’re putting money in the pocket of Mr Woolworths.

There’s every chance these taxation measures will help out the very small players in Australia’s craft beer industry, the ones who are yet to succumb to the siren song of Coca Cola. Unfortunately, when it comes down to it, Australia’s breweries are frequently less boutique than they seem.

All those “artisanal” beer labels filled with fancy, meaningless wording? You might say that they have something in common with MPs, especially around Budget time.