By Afraa Kori
Beer is becoming increasingly unaffordable, whether at the pub, your local brewery or over a BBQ in your backyard.
The federal government’s tax hike is pushing local breweries to their limit, with many saying ‘enough is enough’.
They are rallying behind the Independent Brewers Association’s (IBA) 2025 campaign to keep locally owned beer accessible and affordable for everyday Australians.
Smiley Brewery Co, owner and director, Trent Butcher said the alcohol excise system needs an overhaul, urging the government to take action to create a fairer tax system for breweries.
“Stop pushing it to the side and just allowing it to continue as it has done for too many years. You are taxing a hard working, local industry out of existence!”
“We would like to see some concessions or benefits applied to Australian owned producers.”
Smiley Brewing Co is a relatively new brewery, having been open for about 18 months. Due to its current production volume, the brewery is fortunate not to be directly impacted by the bi-annual excise tax increases at this time. However, this is something that will affect the brewery in the future if the tax structure remains unchanged.
In July 2021 a remission scheme was introduced for Breweries and Distilleries providing a $350,000.00 (per financial year) benefit for alcohol producers. The remission is applied to pure alcohol volume, it is reported on monthly (standard excise reporting).
Trent said they’re currently “below that cap,” allowing them to avoid the increases.
However the remission amount introduced in 2021 isn’t adjusted every 6 months when the excise amounts are, meaning the value of it is eroding away.
While Smiley Brewing Co doesn’t currently suffer any immediate impact, they are challenged by the public’s assumption that drink prices will increase universally.
“What we are seeing is the impact these increases are having on customers and the general public’s view on how expensive it is to go out for a beer at the end of the week or over the weekend.”
“The general assumption is every time one of these increases goes through that the increase hits the taps in every venue (whether it does or not).”
There are two key factors causing a shift in customer movement since opening the business.
“The first being interest rate increases, every time this happens follow’s a couple of quiet weekends, people go to assess their spending habits.”
“The second is excise increases, when these are announced the majority of people think it affects drink prices everywhere, so the already limited available spending money becomes less valuable. People are drinking at home more often than going out.”
Trent Butcher spoke to colleagues at other breweries, and the feedback was that during Covid, customer loyalty and new customer engagement increased.
“Keeping it local” became strong. Breweries enjoyed growth in takeaway sales during the Covid period and even further growth when re-opening after Covid.
The knock on effect of tax increases and cost of living has no doubt impacted consumer choice now.
Consumers have searched out cheaper options which are often wine or wine based products, or cheaper alternatives produced by Kirin, Asahi or the supermarket giants.
“This has impacted production volumes we had estimated when we started planning for the brewery (which was back in 2019),” Trent said.
“We have the ability to grow production substantially, we are only scratching the surface currently. We had initially expected we would have been increasing tank space in year 2, then 3 and so on, but this isn’t the case.”
Smiley Brewing Co is calling on the community to support independent breweries while they fight for excise reform. They encourage people to visit their local breweries, purchase locally made independent beer from bottle shops, and ask the question, “who owns my beer?”
Anyone that wants to support local beer and make sure it’s here for years to come, are encouraged to join the fight via https://independentbrewers.org.au/campaign-2025/
