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.