Finance Consumer Why Friday night beers suddenly got more expensive

Why Friday night beers suddenly got more expensive

Australia's beer tax went up over the weekend.
Australia's beer tax just went up ... for the 71st time in 35 years. Photo: Getty
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The grand Australian tradition of grabbing a drink with a mate could be under threat with the price of beer climbing over the weekend.

Tax on beer increased to $51.31 per litre of alcohol from Monday, after the Australian Taxation Office lifted the alcohol excise in line with inflation.

For beer drinkers, that means a glass at the pub will cost 1.2 per cent more.

That might not sound like much, but Brewers Association of Australia chief executive Brett Heffernan told The New Daily it’s making it harder for ordinary Australians to buy a pint with friends.

Not because a 1.2 per cent hike alone is a sizeable increase, but because it’s the 71st consecutive increase over the past 35 years.

The ATO lifts the country’s alcohol excise in line with the Consumer Price Index every six months, in February and August.

In the past five years alone, the tax paid per litre of alcohol for most beers has increased almost 10 per cent.

Australia now charges more tax on beer than any other country in the OECD and European Union, except Norway, Japan, and Finland, according to research by University of Adelaide Emeritus Professor Kym Anderson.

Australia’s beer tax is a whopping 17 times larger than Germany, the research found, and almost twice that of our neighbours across the ditch in New Zealand.

And with that rate set to increase again in half a year, Mr Heffernan said drinking alcohol is becoming a luxury many Australians can no longer afford.

“We think there’s something fundamentally wrong with a beer with your mates starting to get beyond the reach of ordinary Australians,” Mr Heffernan said.

“That’s the point we’re currently at.”

Not enough to freeze taxes on cold ones

Leaving the rate of tax at its current level “won’t go far enough” to fix the problem, Mr Heffernan said.

“All that will do is lock in the exorbitantly high prices Australians are already paying,” he said.

“Our pitch to government is that they need to address the rate of the beer tax in order for punters to get genuine relief.”

The Brewers Association does not, however, know what the tax rate should be.

“That’s a conversation we’ve started with government. We’re not trying to be overly prescriptive,” Mr Heffernan said.

But for government, the beer tax represents a “good little revenue earner”.

Government nets about $3.5 billion annually from beer taxes when GST is included, Mr Heffernan said.

“It’s quite a lucrative little tax, and the fact that it keeps going up means it’s a good way for government to claw back money,” he said.

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