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Member Update

Distillers welcome government decision on excise relief

Craft distillers across Australia have welcomed the Federal Government’s decision to increase the excise refund cap for distillers from $100,000 to $350,000 per year as part of the 2021-22 Federal Budget.

This decision will deliver much-needed and well-deserved assistance to the hundreds of craft distillers across Australia, most of whom are based in rural and regional areas. It will allow small distillers in every State and Territory to invest more in their business through greater jobs and opportunity to explore new markets.

In essence, small distillers will pay less excise on their first several thousand bottles of spirit meaning they can invest the savings in additional employment, infrastructure, sales and export opportunities.

Australian Distillers Association president Stu Gregor said:

“This is a terrific day for small distillers in Australia and we want to thank the Treasurer and the Federal Government, for supporting small Australian businesses and allowing us to invest more in our people and product to fire-up growth in our sector,”

“We have great ambitions to grow Australia’s exciting, world-class distilling industry and this is a great first step that will see jobs created and businesses grow.

The Australian distilling industry is still incredibly young compared to so many of our international competitors and yet in a short time we have proven we can make some of the world’s best gins, whiskies and rums. This decision will help us to invest in making more of the these Award-winning spirits which will in turn mean more Australians employed in making, moving, bottling, packaging, selling and mixing our drinks.

Everyone in Australia should raise a toast to our great craft distillers (and brewers) tonight.”

The decision was also welcomed by the larger international distillers operating in Australia, who understand consumer tastes are moving towards quality spirits despite a difficult tax regime.

Greg Holland, Spirits and Cocktails Australia chief executive Greg Holland said:

“The best alcohol tax system is a fair and sustainable one, so we thank the Government for taking an important first step towards fixing this problem. However, we also stress that Australia’s spirits tax remains the third highest in the world, and this represents a significant dampener on investment and sustainability within our industry. With a fairer alcohol tax regime in place – one that aligns spirits tax rates with brandy, and freezes CPI increases - our spirits producers can bounce back from COVID and create even more jobs, buy even more produce from local suppliers, including Australian farmers, and help attract tourism back to regional areas.”

The Australian Distillers Association and Spirits & Cocktails Australia, on behalf of their more than 90% of the spirits produced and distributed within Australia, thank the Government and are excited by the opportunity to continue working together to build the industry through local and global investment.

We at the ADA remain optimistic that today’s announcement will represent the first step by the Morrison Government towards unleashing the potential of Australia’s distilling industry.

The ADA is part of an historic alliance of craft distillers and spirits companies calling for urgent government action to fix Australia’s unfair spirits tax, now the third highest in the world and almost ten times higher than the rate in the USA.

The ADA thanks our colleagues at Spirits & Cocktails Australia. Particularly the Chair, Angus McPherson and Chief Executive, Greg Holland – without them, this would never have happened. Together, we lodged a joint pre-budget submission and campaigned, hand in hand, for fair and sustainable tax reform – because we are all in this together. We will continue to work with Spirits & Cocktails Australia to continue to campaign for genuine spirits tax reform.

Stu Gregor
President
1 May 2021

For more information:

Paul McLeay
Industry & Government Engagement
Australian Distillers Association
0418610489
paul@australiandistillers.org.au
www.australiandistillers.org.au

It is in the news! Click here for one of the stories. There will be more to come.

Thank you to every distiller who wrote a letter, signed an open letter, invited an MP, put up a poster, went on radio, tv or gave a comment to their newspaper, spoke to their customers, came to Canberra to lobby, encouraged each other and everything in between. It has been a campaign that has brought us together like never before.

This victory is for everyone who is having a go.

This is the first big step towards fair and sustainable Tax reform for the Spirits Industry. We will continue to call to reduce the excise rate. We are the third highest tax in the world - and it keeps going up twice a year - it is not sustainable.