Australia’s alcohol excise tax rose again today, prompting warnings from the industry that rising drink costs are driving demand for cheap, illicit alternatives. 

The excise hike — one of the largest six-monthly increases outside of COVID-19—will see the tax on RTDS and spirits such as whisky, vodka, gin and rum rise to $110.15 a litre. 

Australia already has the highest spirits tax in the world outside of Scandinavia, with the Australian Government expected to raise $9.2 billion in total alcohol taxes this year alone.  

For a standard 700ml bottle of spirits, approximately $30 goes directly to the Australian Taxation Office in alcohol excise, and that’s before GST is added on. 

It’s the 79th alcohol excise tax increase the industry and consumers have been handed in 40 years. The latest tax rise comes after research has shown illicit alcohol is now being sold alongside legal, taxed products in Australian bottle shops, with some products containing dangerous contaminants. 

Spirits Council of Australia executive director Steven Fanner said: “We have a system where twice-yearly tax hikes on alcohol have been on auto-pilot since the early 1980s. 

“This means that from next week the tax on spirits is now over $110 per litre of pure alcohol – a rate six times higher than the United States and about double New Zealand.  

“This is not a system that should be a set-and-forget — without reform the government risks a myriad of unintended consequences, including driving demand for cheap, black-market alternatives.

“We have seen what has happened with tobacco — when relentless tax increases and inadequate enforcement created market opportunities ripe for exploitation. 

“We have a narrow window of opportunity to prevent the same thing happening with spirits in Australia.”