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Price of beer, spirits expected to increase in Australia

Australians may notice they are paying more for a pint from this week, as the government’s twice-yearly tax hike on alcohol kicks in.

Beer and spirits will be hit by the federal government’s automatic indexation of the alcohol excise, which rises twice a year in February and August based on inflation.

Under the change, the tax on one litre of pure alcohol will be raised from $100.05 to $101.85.

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From Monday, the cost of a pint of beer is expected to jump by about $0.90, while a slab increases by about $20.

Tax increases combined with cost pressures could mean pub goers regularly cop paying $15 for a pint at their local, the Brewers Association of Australia warned.

Australia has the world’s third-highest spirits tax, behind Iceland and Norway, and the fourth-highest beer tax.

Industry leaders are calling for the “unbearable” tax to be frozen to safeguard the industry’s future, warning the decades-old scheme was threatening jobs and Australia’s emerging craft spirits industry.

Spirits and Cocktails Australia chief executive Greg Holland said the automatic indexation was an archaic policy introduced in 1984 that needed to be reconsidered.

“If this tax was appropriate back then, it certainly isn’t now. Our tastes have changed in every way, with more and more Australians appreciating spirits as their preferred tipple in mixed drinks and cocktails,” Holland said.

“We call on the Federal Government to freeze this unbearable tax at the current rate for two years so that we can all sit down at the table and discuss a workable solution.”

Australian Distillers Association chief executive Paul McLeay said 600 distilleries across the country would be hurt by the tax.

McLeay said the indexation has opened up a chasm in pricing between spirits and other alcohol categories, which were taxed at a lower rate from the outset.

“The compounding effect of these six-monthly increases is now being felt with increasing severity by spirits manufacturers and consumers,” he said.

“Without intervention, the current alcohol tax system is increasingly discriminating against Australians who enjoy whisky, gin, vodka and other spirits.”

The alcohol tax does not apply to wine, which is subject to the wine equalisation tax.

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