• Business and Investment

Craft brewers and distillers get a break

As part of the 2018-19 Federal Budget, the Government has introduced new measures to level the playing field for Australian craft brewers and distillers. Eligible Australian alcohol producers will be able to claim a refund on 60% of the excise duty paid up to a cap of $100,000 per financial year. The change will take effect from 1 July 2019 and represents a significant increase from the current cap of $30,000 per financial year.

The concessional draught beer excise rate will also be extended to include smaller kegs. Prior to these changes, draught beer sold in kegs greater than 48 litres had been taxed at a lower rate. This has presented a significant disadvantage for smaller breweries. The concessional excise rates are now to be extended to kegs greater than 8 litres, allowing craft breweries to enjoy similar allowances as their larger competitors.

BDO Comment

BDO welcomes these changes. The Australian brewing industry continues to grow and the number of breweries in Australia has increased from 30 to 379 between 2006 and 2016. While these changes are encouraging, the reforms still do not place breweries on equal footing with wineries, who receive more generous producer rebates of $350,000. There is further scope for the Government to continue to expand this important and successful program for local industry.