With smaller parties announcing their support for a freeze or major reduction in on-premise beer and spirit excise, the industry is calling for the ALP and Liberal Party to do the same.
Late last year, Nationals leader David Littleproud voiced his support for a freeze on beer and spirits excise, while on Monday One Nation chief of staff David Ashby announced on Sky News that the party was in favour of scrapping beer and spirit excise altogether for beer and spirits sold in in the on-premise.
“These days…you’ll pay $12-14 for a schooner, and that’s why less and less people are going to pubs. It’s even more if you want to buy a rum and Coke…This would certainly inspire people to get back out there,” stated Ashby.
Craig Shannon, CEO of ClubsACT, has welcomed any reform that would reduce the effect alcohol excise was having on beverage sales within clubs.
“The clubs industry welcomes any proposal to reduce the impact of alcohol excise in the face the current cost of living impacts facing Australia consumers,” stated Shannon.
“The One Nation policy, in a perfect world, would be great but even a single year excise increase going forward and a 50 per cent reduction of the existing rate would be welcome. We have seen some significant reductions in alcohol sales in our venues over the past couple of years and anything that would reduce the cost of alcohol would be great relief for our patrons.”
Australian Hotels Association (AHA) CEO Stephen Ferguson said that focusing reform on the on-premise makes it a more realistic choice for government, as well as having significant benefits for on-premise venues, their patrons, and beyond.
“The beer and spirits industries have been agitating for a long time on relief to beer and spirits excise. I think all the stakeholders agree that best thing is to just target our requests to on-premise only. On premise makes up about 15-20 per cent in the total beer and spirits market. So we think that’s far more achievable for government, and we also think it brings extra benefits to off premise,” stated Ferguson.
“Basically what we’re saying is that any beverage poured into a glass by a person in a licensed premise should get a beneficial tax rate. And then it also helps those venues themselves, because it makes them more productive and allows them to hopefully get more people into the world, get them socialising, and helps their venue become more productive and more profitable in these tough times.”
The AHA has been advocating for the industry for many years on reforming beer and spirits excise, with efforts ramping up in the last year as the price of schooners continue to rise to an uncomfortable amount for the consumer.
Clubs Australia executive director Rebecca Riant has called on the federal government to implement an immediate 12-month freeze, pointing out the continued excise hikes are making it harder for clubs to do business while supporting their local communities.
“Clubs across the country are once again facing higher costs due to the automatic alcohol excise increase,” she said.
“These biannual hikes leave clubs with two difficult choices — either increase prices for members who are already struggling with cost-of-living pressures or absorb the extra costs, which directly reduces the funding available for vital community programs.”
Encouraging safer socialising
Both Ferguson and Shannon argued that alcohol excise reform would also encourage more in-person socialisation in a post-Covid world.
“There seems to be a shift taking place in the social behaviour of Australians generally and younger demographics in particular. Alcohol in moderation plays a significantly beneficial role in social cohesion in our community when done in-venue where responsible drinking is policed,” stated Shannon.
“Drinking in-venue where staff are trained in responsible service provides a safe space for people to relax and consume alcohol. Anecdotally it seems there is an increase in younger consumers pre- and post-loading in private homes, and going out for shorter periods of time in between, than was historically the case. I fear that this may increase adverse impacts from alcohol consumption if we cannot address these trends. Reviewing the way alcohol excise is applied is an important agenda for us.”
Ferguson reiterated that there were multiple benefits to encouraging socialising in hospitality venues, rather than elsewhere.
“A lot of people are now working from home, but now it’s really about trying to get people back together. And the other really important thing is that it’s far safer. Hotels, bars, club professionals, they all have staff that are RSA-trained. So every time someone orders a drink or a round of drinks, they’re assessed. And there’s also security, and in many premises, there’s CCTV. So it’s a combination of all those things. It’s about socialising, it’s safer and it creates jobs.”
Spirits & Cocktails Australia Chief Executive Greg Holland said the association wanted to see excise reform to enable growth.
“The spirits sector is happy to work with political parties of all persuasions to discuss measures to reduce the burden of the world’s third highest spirits tax,” Holland said.
“While the tax remains this high, it will continue to act as a handbrake on the industry’s ability to attract investment, grow exports and create jobs in the regions, where 50 per cent of distilleries are based.”
With the upcoming federal election date expected to be announced soon, Ferguson noted that it was only the two smaller political parties that have stated their support for excise reform, and hoped the ALP and Liberal Party would also come to the table with a policy that would benefit the on-premise industry and consumers.
“It’s the two small parties at the moment. The Nationals are supporting a freeze, and One Nation supporting a massive cut. We’d like the two major parties to jump on board.”
This article first appeared on Club Management’s sister publication, Australian Hotelier.
Updated Tuesday 18 February, 2022 2:54pm (AEDT): Clubs Australia comments added.