Two pieces of legislation promising a more equitable playing field for the craft brewing sector passed through the lower house on Tuesday, drawing praise from the Independent Brewers Association.
Pending Senate approval, the Treasury Laws Amendment (2019 Measures No. 1) Bill 2019 increases the alcohol excise refund scheme cap from $30,000 to $100,000 per financial year for Australian brewers, distillers and producers of other fermented beverages such as non-traditional cider.
The Excise Tariff Amendment (Supporting Craft Brewers) Bill 2019 will amend the current excise tariff laws that lower excise duty rates for beer in containers larger than 48 litres to now cover smaller containers of 8 litres or more, also from July 1, 2019.
IBA board director Jamie Cook told Brews News that these legislative changes will reap massive benefits for the industry.
Cook said that the IBA has been lobbying the federal government to get the excise rebate shifted from $30,000 to $100,000 and also to lift the excise barrier on smaller kegs.
“In terms of that shift on rebate… at the end of the day the good work of the IBA is really now going to but $70,000 in the pocket of every independent brewer in the country,” Cook explained.
“One major benefit of the IBA being in existence is to be able to lobby government for change like this.”
Cook said that people need to understand exactly what the change to keg excise will mean for brewers.
“Unfortunately in the way it was announced in the budget last year, a lot of people saw it as an actual reduction in excise in terms of the keg piece,” Cook said.
“That’s technically not the case because the reality is keg beer usually pays a lower excise rate than packaged beer but to access that lower rate you had to sell beer in kegs greater than 48 litres.
“So, therefore, there was a barrier there for anyone using smaller kegs.
“Nearly every brewer stopped using smaller kegs in the marketplace because there was an excise impediment due to the legislation.”
This legislative change removes that impediment, allowing brewers to use a smaller keg while maintaining that lower rate of excise on draught beer.
Cook emphasised that the amendment doesn’t put any downward pressure on price, but does allow brewers to use smaller kegs without paying a penalty.
On the matter of keg excise, Cook said that there are several reasons why this legislative change is important to the craft brewing industry.
“Obviously we’re going to see smaller kegs go on tap and turnover quicker, therefore there’s a freshness of beer that drinkers will experience,” Cook explained.
“The other piece is increased diversity of beers on tap.
“Smaller kegs provide venues with an opportunity to have a greater number of beers on tap and still provide quality beer to their customers.
“Obviously being able to handle smaller kegs is going to be an improvement in the handling and safety side of things.
“So the keg excise is really threefold from an industry perspective.”
The government issued a statement yesterday saying that craft brewers will benefit from its changes to taxation, which will “level the playing field” with the large brewers.
“Included in the amendment is reduced taxation for small businesses that manufacture distilled spirits and other fermented beverages like non-traditional cider,” the statement said.
“By regulations made in November 2018, the alcohol excise refund scheme cap will increase on 1 July 2019 from $30,000 to $100,000 per financial year.”