Inflation has eased to its lowest level since March 2021, reducing next week’s expected alcohol excise rise. However, industry bodies have cautioned that drinks producers and venues are still struggling.

The excise duty rates for alcohol rise twice a year, based on the upward movement of the consumer price index (CPI), with the next increase due on 3 February.

The Consumer Price Index (CPI) rose just 0.2% in the December 2024 quarter and 2.4 per cent annually, according to the latest data from the Australian Bureau of Statistics (ABS).

There were concerns the alcohol excise would rise by another 2-3%, however the Australian Tax Office has announced CPI indexation factor is 1.004. 

ABS head of prices statistics Michelle Marquardt said: “December quarter’s rise was the same as the 0.2% increase in the September 2024 quarter. These rises were the lowest recorded since the June 2020 quarter when the CPI fell during the COVID-19 outbreak when childcare was free. Annually, the December quarter’s rise of 2.4 per cent was down from 2.8 per cent in the September quarter.”

The Australian spirits industry said it acknowledged this week’s inflation figures, but stressed they provide “no redress for five years’ worth of excessive tax increases”.

Spirits & Cocktails Australia chief executive Greg Holland said that the latest excise increase has failed to alleviate the burden of having the third highest excise rate in the world.

“Today’s inflation figures are excellent news for the broader economy, but the fact remains that spirits tax is now 20% higher than it was before inflation took off during the pandemic,” he said.

“The latest tax increase, which takes Australia’s spirits excise to $104.31 per litre of alcohol, will make it more expensive for consumers, more expensive for producers, and less competitive for spirits exporters.”

Australian Distillers Association chief executive Paul McLeay said the Australian Government’s persistence with six-monthly tax increases is at odds with its economic goals.

“Last week, the Prime Minister outlined his commitment to Building Australia’s Future by ‘connecting communities with economic opportunity’,” said McLeay.

“There are 700 spirits manufacturers in Australia, half of which are based in regional areas. With the right policy settings, the Australian spirits industry can deliver $1 billion in exports in the next decade.

“That’s why we’re calling on the Federal Government to provide immediate support by freezing spirits excise and working with us to accelerate spirits exports.

“Not only will this deliver on the Government’s trade diversification goals, but it will also support the economic priorities of growing domestic manufacturing and increasing employment opportunities, particularly in the regions.”

Maybe Sammy owner calls for tax cuts

The founder of the Maybe Group, Stefano Cantino, has called for booze taxes to be “drastically” cut to support local distillers and build Australia’s international reputation.

Cantino told the Daily Telegraph that Australia’s soaring alcohol taxes were killing the Australian drinks industry.

“I live in Alexandria, and there is a distillery 10 minutes from my house,” he said.

“Their alcohol is more expensive than something that I can buy from England, which is shipped in a container and arrives here at $10 or $20 cheaper,” he said.

Publican Ash Lyons, the licensee for Bathurst’s Oxford Hotel, said the tax increases were damaging regional venues.

“It’s demolishing an industry, it’s killing it off,” he said.

Bundaberg Rum brings tax fight to NSW

As Australians prepare to pay higher tax on their spirits from next month, Queensland spirits brand Bundaberg Rum has expanded its campaign to freeze the spirits tax to NSW.

A round at the pub is about to become even more expensive, as Australia’s twice-annual tax hike on spirits pushes a night out with mates beyond the reach of more Australians.

In January 2024, Bundaberg Rum launched a campaign across its sunshine state heartland, highlighting Australia’s punitive spirits tax regime. 

As the campaign moves south, billboards and radio advertisements will target heartland Bundy towns including Cairns, Gladstone, Maitland, Coffs Harbour and Bathurst, exposing just how much tax is placed on a bottle of Bundy rum.

Even before next month’s tax increase, consumers already pay $38.40 to the tax office on a $61.50 1L bottle of Bundaberg Rum UP — a 63% tax rate.