FSANZ’s proposal for labelling includes the mandate that energy units (in kJ and Cals) for BOTH the 100ml measurement and the serving size must be labelling, and notes that voluntary labelling in the EU must be done in 100ml serves.

There is another difficulty in the proposal. The format for the energy label is drafted as:

The number of servings per container is to be included. But this may not equate to the number of standard drinks in the bottle, if the product has a non-standard ABV – for example, a gin at 41.5% ABV, with a standard drink size of 30ml, will come up with different numbers for number of servings and number of standard drinks in the container. This may cause confusion, and the FSANZ paper notes consumers do not understand the difference between a serving size and a standard drink.

We will continue to advocate for energy labelling to be clear, consistent and not cause confusion for consumers. We have also argued that small producers be exempt.

Along with Spirits and Cocktails Australia, we wrote to the Assistant Treasurer regarding our concerns about the correct application of taxation to alcohol beverage products, including new products, and brought to his attention the possibility that some products may not be classified correctly for taxation purposes. We believe there are products on the market presenting themselves as “brewed” but do not meet the definition of beer, and products marketed as pre-mixed spirits or liquers but are claiming Wine Equalisation Tax eligibility. While our associations wish to pursue broader alcohol tax reform, in the short term, we wish to ensure that products on the market are paying the correct tax rates.

Two types of ready-to-drink beverages have grown in popularity recently: ‘hard seltzers’ and ‘fruity beers’. Hard seltzers are usually a mix of sparkling water with alcohol and flavours, with the alcohol base coming from either a distilled spirit or from a fermentation process, like brewing. Fruity beers are brewed products mixed with fruit flavours. While we are not privy to the private taxation matters of individuals producers, we are aware that fruity beers and some hard seltzers are labelled and marketed as “brewed”. The current alcohol excise structure provides for a much lower applicable tax to products which meet the definition of ‘beer’; however, there are strict criteria under the Excise Act for products to be eligible for this definition. In particular, the product must contain hops, or extracts of hops, or other bitters so that the beverage has no less than four international bitterness units. The product must also contain no artificial sweeteners.

We have had a number of these products tested with the National Measurement Institute for international bitterness units and artificial sweeteners. A number of these products did not measure the requisite four IBUs, and at least one product had a high reading for the artificial sweetener aspartame. We do not believe these products meet the definition of beer for excise purposes, and should be taxed at the rate of “spirits and other excisable beverages”.

In Queensland, you can apply for an artisan producer licence when the main function of your business is the production on the licensed premises of:

This licence will allow you to produce and sell:

You may also apply to sell your own craft beer and artisan spirits at promotional events for consumption at the event as a sample or for consumption away from the event. The total amount of craft beer that may be sold or supplied to each person for consumption away from the event is nine litres. The total volume for artisan spirits is 1.5 litres.

The Queensland Distillers Association are campaigning for a trial to allow only those with an Artisan Producers License to also sell their products in Independent Grocery Stores that currently do not hold a Qld liquor and wine licence.

A study tour has been proposed to be coordinated by Spirits and Cocktails Australia. The study tour will attend the DISCUS 50th Anniversary Conference in Chicago on 14-15 June 2023. DISCUS have proposed attending the conference and establishing distributor and trade show event to coordinate up to 12 producers who have capacity to, or who are interested in finding out more information to sell into the US market. This will be followed a visits to various craft and large American whisky and spirit producers. The schedule will also visit cooperages and the James B. Beam Institute for Kentucky Spirits at the University of Kentucky.

Expressions of Interest will be requested from Members with an approximate cost of $10,000 plus airfares. Participants may be able to qualify for EMDG grants to subsidise the cost. Members wishing to express an interest, should email our team via the link below and include the subject “JUNE USA DELEGATION”

EOI for DISCUS CONFERENCE

The ISC has partnered with the Australian Distillers Association to offer an annual fellowship. The fellowship offers the successful candidate an all expenses paid trip to Kentucky USA including:

• Tour of ISC Kentucky Cooperage – maker of spirit barrels for many of the great bourbon distillers of the USA
• Tour of Kentucky Bourbon Barrel Cooperage – suppliers of quality used bourbon barrels
• Tour of select ISC Distillery clients
• Spirit barrel Oak 101 and tasting with ISC R&D Director – Andrew Wiehebrink
• Accommodation and meals
• Return airfares

Nominations

Nominations closed end of December 2022. 20 nominations were received and they were of excellent standard. Six were shortlisted and interviewed by the selection panel made up of Patrick Schwerdt from Independent Stave Company, Cam Syme, Vice President and the Chief Executive. Winner to be announced at the 2023 Australian Distillers Annual Conference in Melbourne.

The partnership with the Victorian Government for the $5million per year over the next four years has been progressing successfully.

Industry and Government has agreed to four streams for the funding.

Stream One – Jobs and Skills

Stream Two – Boosting Visitor Economy

Stream Three – Infrastructure

Stream Four – Export market development

The Victorian Government has funded a position of an Industry Development Officer to assist in the Victorian Distillery Door Program. The grant was provided to the Australian Distillers Association to recruit and manage the role. Funding is confirmed for 18 months, but is expected to continue, subject to meeting the grant objectives. Whilst Richard is managed by the Australian Distillers, the strategy and direction comes from Spirits Victoria Association. Victorian members are encouraged to welcome Richard to the role and reach out to him if you have any issues. Richard can be contacted below.

CONTACT RICHARD

At the end of January 2023, we lodged a joint Pre-Budget Submission, with our colleagues from Spirits and Cocktails Australia, for consideration ahead of the 2023-24 Federal Budget.

Our submission calls on the Government to make modest changes to Australia’s spirits tax regime – by reducing the spirits excise rate and freezing CPI indexation – to create the conditions for the sustainable growth of the Australian spirits industry.

The key messages underpinning our submission include:

This latest CPI increase means we are now staring down the barrel of paying $100 tax per litre of alcohol. This means Australian distillers cannot adequately invest to expand our businesses and explore new opportunities, like export or distillery door tourism. This particularly impacts regional communities because two-thirds of distilleries are based in regional areas. It also runs contrary to the government’s ambition to build local manufacturing capability.

In response to the latest CPI increase to spirits excise, a media release was issued to trade media, resulting in the publication of two articles:

We have commenced a comprehensive communications and government relations strategy to enhance our advocacy for the Parliamentary Inquiry and tax asks, in the lead up to the Federal Budget in May. This will include additional media opportunities to publicly make our case for change to support the sustainable growth of our industry.

Parliament has resumed for the 2023 calendar year. The Association has met with both Minister Husic and Assistant Minister Ayres and advised them we are continuing our campaign for a parliamentary Inquiry. We are calling on the new Albanese Government to establish a bi-partisan Parliamentary Inquiry into the Australian Spirits Industry. Much like what happened in the wine industry 40 years ago, we need Government intervention to allow us to position to a high value, premium and export ready industry.

Our recommended terms of reference are:

1) Examine the current and potential contribution of distilled spirits to the Australian economy and employment, including

a) Its impact along the supply chain, incorporating:

b) Agriculture

c) Manufacturing

d) Retail

e) Tourism and Hospitality

f) Transport (Rail and Trucking Logistics)

g) Its impact in rural and regional Australia

h) Export values, volumes and markets

2) Identify key barriers to growth of the industry, and propose solutions to address these barriers, including:

a) Domestic and foreign investment

b) Sufficient and appropriate labour and workforce skills

c) Value adding manufacturing, transport and inventory infrastructure

d) The spirits excise system, including deregulation solutions

e) Conflicting or contradictory State and Territory licensing regimes

f) Discrimination against distilled spirits in regulatory settings

g) Key trade barriers in export markets

h) Innovation, including through the role of global companies

3) Identify the optimal regulatory framework and settings to promote sustainable growth, including:

a) Job creation

b) Environmental sustainability, energy use and efficiency, water, packaging and transport

c) Innovation

d) Technical standards for production

e) Label integrity, including for export markets

f) Geographic indicators, domestic and international

g) Export readiness, including market intelligence and international distribution information

h) The possible establishment of an independent statutory authority to regulate and promote Australian spirits

A highlight of the 2022 Annual conference was the introduction of the Hall of Fame to acknowledge and celebrate the significant contributions of members in advancing the growth of the Australian spirits industry.

Inaugural members were:

Members are requested to nominate any member they believe has made a significant contribution to advancing the growth of the Australian spirits Industry. Your nomination, and reasons for the nomination, should be sent to the email link below, with the subject line “HALL OF FAME” for the Board’s consideration. Closing date for nominations is 12 noon Monday 6th March 2023.

NOMINATE FOR HALL OF FAME

In the lead up to the Annual Conference and to kick start engagement with 2023, a series of member communications have been produced. We produced a hard copy of a “Thank you for being a member”. This was sent to every person who has updated their contact details in the member portal. Members also received a cap to acknowledge their membership. The brochure had several call to actions including: sign up the rest of your team to the members portal; register for the 2023 conference; join us on socials; and, sign up a non member.

A “Join Now” brochure was produced to encourage commercial distillers to join the Association which will be used by the Industry Development officers, our database of non members and any branch or organisation who are able to assist to sign people up to the Association.

ANOTHER CRIPPLING rise in alcohol excise for spirits’ producers this week – to nearly $100 per litre – will put further pressure on Australian spirits manufacturers.

Spirits and Cocktails Australia chief executive Greg Holland described the excise hike of 3.7% as a “cruel blow” for an industry already hit hard by high inflation.

“This latest excise hike means that spirits producers are now staring down the barrel of paying $100 per litre of alcohol. Australia already pays the third highest spirits tax in the world, with the impost worsening every six months due to these automatic CPI increases,” Mr Holland said.

“It is unsustainable.”

“This six-monthly tax hike is felt by spirits producers right across the nation. It is a handbrake on the jobs, investment and innovation needed to help our industry truly compete on the world stage,” he said.

“Australia’s most exciting industry is being held back by one of the world’s most punitive tax systems.”

Mr Holland said the spirits sector delivers $11.6 billion in total value-add to the Australian economy and employs around 5,000 people in manufacturing. Critically, two-thirds of these manufacturing operations are in regional and rural Australia, bringing important economic benefits to these communities.

“But we are still only seeing a fraction of the potential that the Australian spirits industry represents – and that will continue while we are made to suffer this crippling tax system,” he said.

Australian Distillers Association chief executive Paul McLeay said the industry understood the challenges facing the Federal Budget but that the time was right to consider “modest changes” to current spirits excise arrangements to unlock opportunities for investment and growth.

“A simpler, fairer tax system will turbocharge the investment environment for spirits producers, both domestic and global, to create premium drinks for local consumers, as well as grow export markets,” said Mr McLeay.

“It will be a win-win. We can have the world’s best producers of high-quality spirits right here in Australia. All we are asking for is sensible and modest reforms from a Federal Government aiming to build up the capability of domestic manufacturing industries,” he added.