It’s no secret Australians love their beer, but their wallets are paying the price almost as much as their livers.
Australia is currently the third most expensive country in the world in which to buy a pint of beer, with prices 37% higher than in the United States. Part of this boils down to the amount of tax paid on each beverage, with the Australian Liquor Industry governed by a confusing labyrinth of tax regulations. Two different taxation systems exist concurrently; wine is taxed by value whilst other products are taxed by alcohol content, meaning there are 16 effective tax rates as well as a multitude of different concessions.
Beer alone is taxed at no less than 8 different rates; enough to give you pause before ordering another pint. If you choose to buy packaged beer, check whether it’s classified as low alcohol (<3% alcohol by volume), medium (3-3.5% alcohol by volume) or full-strength (>3.5% alcohol by volume) as this will affect the tax you pay (see below table). These excise rates are indexed twice a year against inflation – generally at the start of February and August.
|Table 1: Alcohol rates – Beer*|
|Tariff item||Description||Unit||From 1/2/2017||From 1/8/2017|
|1.1||Alcohol volume not exceeding 3%, individual container up to and including 48 litres||$ per litre of alcohol||41.70||41.95|
|1.2||Alcohol volume not exceeding 3%, individual container over 48 litres||$ per litre of alcohol||8.34||8.39|
|1.5||Alcohol volume exceeding 3% but not exceeding 3.5%, individual container up to and including 48 litres||$ per litre of alcohol||48.57||48.86|
|1.6||Alcohol volume exceeding 3% but not exceeding 3.5%, individual container over 48 litres||$ per litre of alcohol||26.12||26.28|
|1.10||Alcohol volume exceeding 3.5%, individual container up to and including 48 litres||$ per litre of alcohol||48.57||48.86|
|1.11||Alcohol volume exceeding 3.5%, individual container over 48 litres||$ per litre of alcohol||34.21||34.42|
|1.15||Produced for non-commercial purposes using commercial facilities or equipment, alcohol volume not exceeding 3%||$ per litre of alcohol||2.93||2.95|
|1.16||Produced for non-commercial purposes using commercial facilities or equipment, alcohol volume over 3%||$ per litre of alcohol||3.39||3.41|
* Excise duty on beer is payable on the alcohol content above 1.15% by volume in your finished product.1
Industry experts have called for taxation reform, a sentiment echoed in a white paper published by Joe Hockey which found the current system to be unnecessarily complex. Changes have yet to be made though, so you may want to think about choosing your drink more carefully when you’re next down at the pub.