New Zealand brewers want to further capitalise on their booming beer exports by accessing a tax break currently only accessible to Australian brewers.
By excluding NZ brewers, Australia’s Brewery Refund Scheme that was introduced in 2012 may be in breach of the current free trade agreement between the countries, the intention of which is to “create a single economic market and remove market distortions”, the Brewers Guild of New Zealand argues.
“The New Zealand beer product is competitively and commercially disadvantaged comparative to similar Australian beer product,” it says.
“For New Zealand breweries to have access to this Brewery Refund Scheme would provide a competitive and commercial stimulus to boosting exports and growth and, not least, provide a fair and level playing field into the Australian market.”
The NZ brewers say the success of their winemaking counterparts after they were given access to the Australian Wine Equalisation Tax (WET) rebate gives an indication of the scope for growth.
“We would like to investigate whether similar advantages could be secured for New Zealand brewers,” the Brewers Guild says.
However, Craft Beer Industry Association chair Peta Fielding says the Brewery Refund Scheme was designed to support the growth of the Australian craft brewing industry and the scheme’s structure and operation is vastly different from the wine producer rebate.
“For example, the maximum rebate available under the Brewery Refund Scheme is a small fraction of that of the WET ($30,000 versus $500,000),” she says.
“Further, unlike their winemaking counterparts, brewers must first meet their excise obligations in full and are then, subject to certain conditions, able to claim back a portion of the amount paid as a rebate.
“The effect of the structure of the rebate in combination with its relatively modest amount, is the brewers’ rebate does not create the ability for Australian craft brewers to generate a price point advantage in the marketplace.”
Fielding says the CBIA has argued in its submission on the Federal Government’s Tax White Paper that the Government would see greater value in increasing the rebate to $100,000 and ensuring it remains available only to Australian brewers as an investment in the growth of the sector – “as opposed to expanding the scope of the rebate whereby rebate funds are sent offshore, without any consequent benefit to the Australian industry or economy”.