Liquor lobby seeks tax breaks as ATO’s alcohol rate increases

Anton NilssonNCA NewsWire
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Camera IconNot Supplied Credit: News Regional Media

A case of Bundaberg rum and cola could increase by more than $20 over the next decade due to tax hikes on booze, a liquor industry lobby group claims.

Spirits and Cocktails Australia called for tax increases to be halted for three years to help producers.

But a leading non-profit organisation working to minimise alcohol-related harm said that request was a “slap in the face” for taxpayers.

The Australian Taxation Office announced this week the rate on spirits would increase from $88.91 per litre of pure alcohol to $90.78 from next month.

The tax on alcohol tends to increase twice a year. Supplied
Camera IconThe tax on alcohol tends to increase twice a year. Supplied Credit: Supplied
Drinking and driving concept. Car key and alcohol glass on wooden background. 3d illustration.
Camera IconThese rises can be passed on to consumers. iStock/Rawf8 Credit: News Regional Media

The ATO raises the excise duty rates for alcohol twice a year, in line with inflation, and the most recent change is an increase of about 2.1 per cent.

The lobby group Spirits and Cocktails Australia said the twice-yearly increases could be passed onto consumers.

That would mean the price of a case of 24 Bundaberg rum and coke cans – which are taxed at the same rate as hard liquor – would rise to more than $100 within a decade, according to the industry body.

Major retailers currently charge between $74 and $77 for a case.

Spirits and Cocktails Australia said the hikes would make it harder for the industry to stay profitable and urged the ATO to change the way it taxes spirits.

“The Australian way is to give a hand in a time of crisis, but instead this government has given us a hike – the fourth brutal tax hike since Covid arrived on our shores,” chief executive Greg Holland said.

Australians spent $15.6 billion on alcohol in 2020. Supplied
Camera IconAustralians spent $15.6 billion on alcohol in 2020. Supplied Credit: Supplied

But retail figures show booze producers had no problem making money during the coronavirus pandemic’s first year.

The firms raked in $15.6 billion in retail sales in 2020, a 26.7 per cent increase on 2019, according to a Roy Morgan analysis from last year.

World Health Organisation research has shown raising the cost of alcohol tends to reduce demand and levels of alcohol-related problems in society.

Foundation for Alcohol Research and Education chief executive Caterina Giorgi said booze firms had profited from the pandemic while alcohol-related ambulance call-outs had increased.

“At a time when our healthcare system and hospitals are overwhelmed and when people are doing it really tough, it’s a slap in the face to us all to see alcohol corporations, who are making super profits, asking for more of taxpayers’ money,” Ms Giorgi said.

“Right now, our focus should be ensuring resources go towards people’s health and wellbeing, not the deep pockets of alcohol companies.”

Originally published as Liquor lobby seeks tax breaks as ATO’s alcohol rate increases

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