CRAFT beer could become more affordable thanks to a proposed tax cut in federal budget.
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A beer tax that sees independent brewers paying 40 per cent more for using small kegs will be cut in the federal budget.
Currently, draught beer sold in kegs exceeding 48 litres is taxed at lower rates compared with beer sold in smaller kegs.
The tax cut will see a more level playing field with concessional draught beer excise rates to be extended to kegs of 8 litres or more. The changes would be introduced from July 1, 2019.
"We are changing the rules to ensure that small breweries and distilleries around the country can actually compete on the same level playing field as the big guys," Treasurer Scott Morrison said.
As well as the tax cuts, the federal government also earmarked an improvement on the alcohol excise refund scheme.
The scheme’s cap will increase from $30,000 a year to $100,000, from July 1, 2019, for all brewers and distillers.
It means alcohol manufacturers can claim a refund of 60 per cent in the excise duty paid on beer and spirits of up to $100,000 a year.
Better experience for beer drinkers at the taps
Bendigo Beer president Trevor Birks said from a punter’s point of view, the tax cuts would improving the drinking experience.
“The best thing for consumers is because (brewers can supply) 30 litre kegs (at the same price as larger kegs), it means fresher beer and a better experience,” he said.
“Publicans can commit to buying from more breweries, and with only 30 litre kegs on tap, they can turn the taps over quicker, which means the range can be changing a lot.”
But the real benefit for the tax would be in the development of small breweries, Mr Birks said.
“Higher alcohol beers might come down a little in price but (independent) brewers are working on tight margins,” he said.
“The extra tax relief will be reinvested into businesses who can hire more people on, buy better equipment, or source better ingredients.”
Tax cuts providing brewers with opportunities
Brookes Beer owner Doug Brooke said the tax cut would benefit thousands of small businesses around Australia.
“There are many thousands of small venues around Australia that, for whatever reason, haven’t been able to use a 50 litre dispensing system,” he said.
“Now there is an economic option for a 10L, 20L or 30L system in small venues.
“It could (make tap systems) more efficient and have less waste with craft beer being served from a keg rather than a glass bottle.”
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Mr Brooke said there would be new opportunities for all brewers.
“It could help space restrictions in venues with possibility of a small format keg counter-top system,” he said.
“We would definitely be interested in that option as well as from the home perspective where (beer lovers) could have a more affordable keg system at home.”