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Have you noticed beer just got more expensive?

By Grace Ormsby

February 04 2020
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Have you noticed beer just got more expensive?

By Grace Ormsby
February 04 2020

As of this week, it’s now more expensive to buy a beer, no matter where in Australia you might be.

Have you noticed beer just got more expensive?

By Grace Ormsby

February 04 2020
Share

As of this week, it’s now more expensive to buy a beer, no matter where in Australia you might be.

The twice-yearly indexation of alcohol excise rates has just taken place, and it’s set to increase the price for all beer products available in Australia, thanks to a corresponding increase in the consumer price index (CPI).

For alcoholic beverages, excise rates are expressed per litre of alcohol – calculated by multiplying the actual volume of a product by its alcoholic strength.

According to the Australian Taxation Office, the CPI indexation factor for rates from 3 February is 1.012.

The Brewers Association of Australia has noted that it’s the 71st consecutive hike on beer tax.

The increase means we are now paying the fourth-highest beer tax in the world, according to a report commissioned by the Brewers Association and undertaken by Emeritus Professor Kym Anderson.

In Australian dollar terms, we pay 17 times the tax that our German counterparts do for beer, the association has reported.

We also pay seven times more than we would in the United States for the same amount of beer, and double that of New Zealand.

Brewers Association of Australia CEO Brett Heffernan said, “It’s getting to the point that having a beer with your mates is beyond the reach of ordinary Australians.”

“By far the biggest cost in the price of a typical Australian beer is tax,” he highlighted.

“It’s not the ingredients, production costs, advertising, transport or even retail overheads and profits – it’s Australian government tax.”

Mr Heffernan outlined how “a massive 42 per cent of the retail price on a carton of beer is tax”.

“Of the $52.00 retail price for a typical carton of beer at 4.9 per cent alcohol, $21.84 goes to the taxman.”

“Now it’s going up again,” he continued, stating that “most Aussies simply are not aware they are being hit so hard, or so often, with beer tax”.

Here’s a break down of the changes:

Light beer (alcohol volume not exceeding 3 per cent)

For individual bottles and cans, the tariff to be applied based on the new figures is more than 50 cents higher per litre of alcohol.

This figure will see tariffs jump from $43.53 to $44.05 per litre.

For tap beers connected to either a pressurised gas delivery system or pump delivery system in containers that are between eight and 48 litres, the price will lift by 10 cents per litre of alcohol – from $8.71 to $8.81.

Mid-strength beer (alcohol volume between 3 per cent and 3.5 per cent)

For bottles and cans smaller than eight litres, or eight to 48 litres where they aren’t designed to connect to a pressurised gas delivery system or pump delivery system, prices are now up 61 cents per litre of alcohol, from $50.70 to $51.31.

For tap systems between eight and 48 litres, prices per litre of alcohol have seen a lesser increase, with tariffs now $27.59 from $27.26.

Full-strength beer (alcohol volume exceeding 3.5 per cent)

Full-strength bottles and cans for personal consumption will be slapped with a tariff hike comparable with mid-strength beer.

This will see taxes of $51.31 per litre of alcohol applicable to such sales.

On tap, tariffs will jump from $35.71 to $36.14 per litre of alcohol for full-strength beer varieties.

But what about spirits?

They are also subject to the tariff changes.

Buying excisable beverages with an alcohol volume content that is higher than 10 per cent will now see consumers slugged an extra $1.03 per litre of alcohol contained in the end product.

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About the author

Grace Ormsby

Grace is a journalist on Momentum Media's nestegg. She enjoys being able to provide easy to digest information and practical tips for Australians with regard to their wealth, as well as having a platform on which to engage leading experts and commentators and leverage their insight.

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