Australia’s drinks and hospitality industry has largely expressed its disappointment at the Albanese Government’s Budget that was handed down last night.
While the Australian Hotels Association welcomed confirmation of the draught beer excise freeze, many other parts of the industry were disappointed, including:
- Australian Grape & Wine said the Budget lacked meaningful support for the grape and wine sector
- Spirits & Cocktails Australia said the Budget has done nothing to rectify the handbrake that is on Australia’s spirits industry,
- The Independent Brewers Association said
- Retail Drinks Australia expressed disappointment at that the Budget did not do more to support small businesses.
THE WINE INDUSTRY
Australian Grape & Wine Chief Executive Lee McLean said: “This Budget is another blow for growers and winemakers across Australia.
“It fails to deliver the targeted programs or strategic investment needed to address the serious challenges facing one of Australia’s most iconic and economically important regional industries.”
The Government had already announced its plan to increase the Wine Equalisation Tax (WET) producer rebate cap to $400,000, which Australian Grape & Wine acknowledged as a welcome measure for some small and medium-sized producers.
“We welcome the increase to the WET rebate cap – it will assist some producers with much-needed tax relief in the years ahead,” said McLean.
“But tax relief alone doesn’t address the structural crisis gripping our industry, largely driven by the lingering impacts of trade impediments our producers did not initiate, or deserve.”
The Budget includes $6.8m for international agricultural engagement and market access, which may benefit some wine exporters. Australian Grape & Wine said this falls well short of the coordinated, sector-specific investment required to diversify markets and rebuild export momentum.
“This isn’t the bold action our sector has been calling for – it’s a modest allocation spread across all of agriculture,” McLean added. “We asked for targeted investment in sustainability programs, export assistance, and domestic tourism development. None of that has materialised.”
THE SPIRITS INDUSTRY
Spirits & Cocktails Australia and the Australian Distillers Association said the Budget’s predictions of a challenging and uncertain global economy was further proof the Government must act now to unlock the $1bn export opportunity for Australian spirits.
Greg Holland, CEO of Spirits & Cocktails Australia said: “While we welcomed the Government’s positivity about the domestic economy, we cannot overlook its prognosis of a volatile and unpredictable global economy that guarantees ongoing trade disruption.
“Against this landscape, growing Australian spirits exports can help the Treasurer achieve his stated ambition of ‘a more productive, dynamic and resilient economy’.
“The Budget has done nothing to rectify the handbrake on our industry in the form of the world’s third highest spirits tax,” Holland added.
“In fact, the Albanese Government has only exacerbated the structural inequity in Australia’s alcohol tax regime with the draught beer freeze that has been confirmed in the Budget papers.”
Australian Distillers Association Chief Executive Paul McLeay welcomed the $50,000 increase to the alcohol manufacturers remission threshold, that will provide much needed headroom for Australian distillers to reinvest back into their businesses.
“The uplift in the Alcohol Manufacturers Remission will go most of the way to restoring the value of the scheme in real terms, following rampant inflation since its inception,” McLeay said.
“However, more needs to be done to provide the foundations to support sustainable long-term growth and unleash the industry’s $1bn export potential.
“This must start with adopting the Spirits Export Accelerator Strategy (SEAS) proposed in the industry’s Pre-Budget Submission.
“While we admire the Government’s long-term commitments to net zero manufacturing opportunities, we know there is immediate demand in export markets for high quality, differentiated Australian spirits products that value-add to Australian agriculture.”
THE BEER INDUSTRY
The Independent Brewers Association (IBA) said that while the Budget offered no new direct support for the independent brewing industry, there was a glimmer of hope.
While the IBA said the pre-Budget announcement of a freeze on draught beer tax was a step in the right direction, it is not a huge benefit to independent brewers who struggle to break up contracted beer taps.
The IBA also said it had strongly advocated for the Government to move its promise to increase the excise rebate by $50,000 forward from mid-2026 to 2025 as that would have had a greater benefit for our Australian owned businesses. But to no avail.
“Australian owned breweries are continuing to close, and consumers have less choice in part because independent brewers do not have free market access to sell their beer,” the IBA said.
The Government has committed an extra $38.8m of funding for the Australian Competition and Consumer Commission (ACCC), towards its investigation of misconduct in the supermarket and retail sector including misleading and deceptive pricing practices. The IBA while this appears to the implementation of some aspects of the supermarket inquiry, which did not include alcohol retail “the inclusion of the broader retail sector gives room for hope”.
IBA CEO, Kylie Lethbridge said: “We will be the first ones knocking on the door of the ACCC ensuring that some of the funding they have been allocated goes to addressing the shocking market conditions in the beer industry.
“Never has there been a point in time where so many federal inquires have made recommendations to address our issues – and we will be holding any future Government’s to account for those recommendations.”
The IBA has called on the Coalition to address the following in its Budget reply tomorrow:
- Expanding the two-year freeze on excise to ALL beer (not just draught) from 1 July 2025;
- Committing to an increase in the excise rebate of $50,000 from 1 July 2025;
- Commit to a review of the brewing industry to ensure fair market access for Australian OWNED business.
THE RETAIL SECTOR
Retail Drinks Australia CEO Michael Waters welcomed some parts of the Budget, as the Government looked to tax cuts to try and ease the strain on household budgets, but said the Budget has not done enough for small business.
“Whilst we are pleased to see the announcement of modest tax cuts for all Australians and cost-of living measures such as the extension of energy bill relief, the Budget could have gone much further in its support for small businesses, who are finding conditions extremely difficult to navigate,” Waters told The Shout.
“For instance, it was disappointing that the Instant Asset Write-Off scheme was unaccounted for in the Budget, as this has been a helpful measure for many businesses, allowing them to write-off large purchases of necessary equipment and other items – this should have been made permanent at the very least.”
PUBS ARE HAPPY
Meanwhile Australian Hotels Association CEO Stephen Ferguson welcomed the previously announced news that the Government would freeze excise on draught beer.
“Great to see beer excise confirmed in the Budget – thanks to the Prime minister for that – a great win for the hospitality sector,” Ferguson told The Shout.
