19/02/2021 - 15:19

Distilleries unite against spirits taxes

19/02/2021 - 15:19

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Perth distilleries, including Whipper Snapper Distillery and Sin Gin Distillery, are lobbying the government to change taxes on spirits, which they claim are stunting industry growth.

Distilleries unite against spirits taxes
Whipper Snapper Distillery co-founders Jimmy McKeown (left) and Alasdair Malloch say high spirits taxes are limiting their growth.

Perth distilleries, including Whipper Snapper Distillery and Sin Gin Distillery, are lobbying the government to change taxes on spirits, which they claim are stunting industry growth.

Led by the WA Distillers Guild and the Australian Distillers Association, distilleries are putting pressure on Treasurer Josh Frydenberg to increase the craft distiller excise refund limit from $100,000 to $350,000 to match the wine producer rate, cut the spirits tax rate to match the brandy tax rate, and freeze CPI indexation.

Earlier this month, members of the Australian Distillers Association and Spirits & Cocktails Australia travelled to Canberra to present a pre-budget submission to federal ministers with the requests.

The submission included independent modelling from PwC, which said the associations' requests would boost tax revenues by $1.4 billion over forward estimates.

Whipper Snapper Distillery managing director Alasdair Malloch said the spirits industry was on the cusp of huge growth, but many distillers were unable to commit to expanding or employing more staff while carrying the burden of a spirits tax that currently increased automatically every six months.

“We’re working hard at Whipper Snapper Distillery in East Perth to bounce back from a volatile and disruptive year caused by many challenges, such as the COVID pandemic and the associated lockdowns, and we’re asking the government for a fair go on tax as we do that,” he said.

“There’s wide ranging support for this because excise relief, whether it’s in a rebate or a change in the excise rate, is necessary to grow our businesses.”

Mr Malloch said the proposed cuts would help distillers expand and hire more people.

Sin Gin Distillery owner and WA Distillers Guild president Kate Sinfield said Australia had one of the highest spirits taxes in the world, which makes the country’s locally produced spirits expensive for consumers.

She said it made it very difficult to compete with cheaper, international brands.

Ms Sinfield said the craft distilling industry had grown enormously in the past few years and the laws had not been updated.

“It’s only been in the last 20-25 years that distilling has really happened again in Western Australia particularly, and probably not dissimilar to other states, and so the regulations haven’t caught up with what we are doing here, we were just relying on imports before,” Ms Sinfield told Business News.

According to Business News’s Data & Insights, 16 distilleries have been established in WA in the past five years, including Spirit of Little Things and Republic of Fremantle.

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