Australian spirits manufacturers are tonight questioning the Federal Government’s overly optimistic growth projections for the industry, which are in spite of the Budget’s failure to take action on spirits excise.

Today’s Budget shows that spirits excise is down $200 million on estimates published last year.

Forward estimates nevertheless predict growth of $180 million for 2024-25 and annual growth of $200 million for the three years thereafter.

Spirits & Cocktails Australia chief executive Greg Holland said these projections appear misguided while spirits excise remains unchecked.

“It’s difficult to understand how Treasury has arrived at these growth predictions for our industry while we are still completely hamstrung by the world’s third highest spirits tax,” he said.

“We are already paying $101.85 per litre, with six-monthly increases coming yet again in August and February.

“We wish we shared the Government’s optimism, but its growth forecast is simply not achievable under these conditions.”

Australian Distillers Association chief executive Paul McLeay said the inaction on spirits tax is particularly disappointing given the Government’s ambitions to grow domestic manufacturing.

“While we are hugely supportive of the Future Made In Australia policy, we hope the Government does not miss the opportunity to scale other manufacturing industries like spirits, in pursuit of its more costly objectives in solar, green steel and minerals processing,” he said.

“We have 700-plus distilleries in this country making products that simply cannot be replicated by manufacturers in other nations, because they are singular expressions of Australian ingredients, provenance and technical prowess".

“It won’t take billions of dollars of investment to kick-start our industry. We don’t need excessive subsidies, we just need modest adjustments to policy settings, starting with tax relief.

“We look forward to making this case for the Government in the food and beverage manufacturing inquiry over the coming months.”