Australian spirits manufacturers have renewed their calls for a freeze on spirits tax increases, as bi-annual indexation continues to fuel inflation and cost of living pressures.

Spirits excise is once again scheduled for increases in February and August of 2024, having already risen in line with the Consumer Price Index (CPI) by a total of 12.5% in under two years.

Spirits & Cocktails Australia chief executive Greg Holland said spirit manufacturers cannot stomach further increases to this tax, which is the world’s third highest at $100.05 per litre of alcohol.

“The Federal Government’s own data is starting to bear out the folly of this outdated excise regime,” he said.

“Despite a record high tax, the December budget update revealed a projected $170 million shortfall in revenue from spirits excise in 2023-24.

“This is clear evidence that the tax is making spirits unaffordable for consumers. Continued increases would be nonsensical; consumers, manufacturers and the Government all lose out to this inefficient tax.”

Furthermore, the Australian Bureau of Statistics’ September Quarter results found spirits, powered by bi-annual excise increases, was the largest contributor to an annual CPI increase of 4.9% for the alcohol category.

Holland said this demonstrates the extent to which CPI indexation is actually fuelling the inflation problem that the Federal Government is purportedly trying so hard to address.

“This highlights that the rising costs of alcohol, fuelled by excise increases, is being felt by hardworking Australians.”

Australian Distillers Association chief executive Paul McLeay said the 600 distilleries spread across the country need urgent respite from this punitive tax.

“The average Australian would be appalled if they knew just how much of the hard-earned money they spend on spirits goes directly to the Government,” he said.

“Spirits tax above $100 a litre should be a barbecue stopper this summer.

“We are calling on the Government to freeze this un-Australian and unbearable tax so we can work together to develop policy settings to support the sustainable growth of this promising industry.”