How COVID has decimated pub beer sales

Australian Tax Office figures show that pubs and clubs sold 40 million fewer pints of beer between July and September last year than they did during the same period in 2019 and before COVID-19.

That’s a massive drop of more than 50% in beer sales for struggling venues.

In 2020, pubs and clubs lost over $1 billion in beer sales due to lockdowns and other restrictions, but these latest figures from the ATO show that losses for 2021 could well exceed that.

The ATO recorded 903,982 litres of alcohol as having been served in beers over the counter in July-September 2021 compared to 1,993,027 litres during the same period in 2019.

Pubs have also been hit with staff shortages and supply chain issues in recent months.

Calls to reduce beer tax

Chief Executive of the Brewers Association of Australia John Preston said: “These figures show that the damage to our pubs and clubs from the pandemic actually worsened last year. On average beer sales are around 70% of alcohol sales volumes in licensed premises and a drop of this severity has hit pubs and clubs incredibly hard.

“We are calling for the Federal Government to use the forthcoming Federal Budget to reduce Australia’s fourth highest beer tax in the world to give pubs and clubs a fighting chance.

“We are very concerned that on February 1 the Australian Government will hit Australian beer drinkers with one of the biggest tax increases in more than a decade – it’s not right and it’s not sustainable. Other countries have been reducing their tax on draught beer to give pubs and beer drinkers a break.”

Research released by the Brewers Association last year revealed that Australia is set to have the third highest tax rate on beer in the developed world by 2023.

The research, conducted by the School of Economics at the University of Adelaide, found that Australia’s tax rate, currently the fourth highest in the OECD, will overtake Japan’s in October 2023. This is due to the twice yearly tax increases in Australia and a beer tax cut that has been announced by the Japanese Government.

At that stage only Norway (1st) and Finland (2nd) out of the entire OECD will have higher taxes on beer than Australia and Norway reduced its tax rate by 10% this year, narrowing the gap with Australia.

UK Chancellor of the Exchequer, Rishi Sunak MP, slashed the tax on draught beer in the UK in October to support the hospitality and brewing sectors.

“We are totally out of step on beer tax with comparable countries like the UK and on a different planet from major beer producing nations such as Germany, the US and Belgium where the rate is less than a quarter of what we pay here,” Preston said.

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Categories: Business