The Australian Distillers Association appeared before the Inquiry Into Food and Beverage Manufacturing in Canberra and made our case to freeze the current excise rate, establish a Spirits Australia body and more.

The Commonwealth House Standing Committee on Industry, Science & Resources is currently conducting a Parliamentary Inquiry which is investigating the opportunities for expanding innovation and value-adding in the food and beverage manufacturing industry in Australia.

The Inquiry has visited Archie Rose and Hickson House Distilleries. The inquiry conducted hearings in Sydney and received evidence from Archie rose and Hickson House. They appeared with Diageo.

The inquiry also conducted hearings in Canberra to hear from the peak bodies, Australian distillers Association and Spirits & Cocktails Australia. Holly Klintworth and David Vitale represented ADA and were supported by the Chief Executive.

The Committee will also be visiting our members, Lark in Hobart and Starward Melbourne.

Major Themes for Food and Beverage Manufacturing in Australia

Below is a summary of the submission made by the Australian Distillers Association.

1 Review of Excise

We supported the strong calls for excise reforms made by previous witnesses from Spirits and Cocktails Australia, as well as those made by Hickson House, Archie Rose and Diageo in the previous Hearings. In fact, we noted the committee has nearly 50 submissions to this inquiry that call on the urgent need for excise reform in some form or another.

Freeze for two years to provide certainty for investment, allow for reinvestment and create jobs – particularly in regional areas.

Use the two-year freeze to conduct a comprehensive review of excise. Current policy settings were put in place 40 years ago and are no longer fit for purpose. There were two. Australian distilleries that are in operation when the tax regime was put in place – there are now 700 and the settings are not fit for purpose.

We also called for an urgent review of the Remission scheme. This has been in place for nearly 3 years, and as you can see from the submission from Medium sized producers, there are serious implications of the “one size fits all” approach that has significant consequences for a growing industry and acts as a handbrake to growth.

We call on the government to sit down with industry to review the operations to ensure they align with stated public policy outcomes.

2 Strong and sustainable growth to add value to the economy

Like wine, Australian spirits come from the soil. We use Australian grains, grapes and sugar to produce our product. These are enhanced with Australian botanicals and casks to produce a uniquely Australian product. The value add in our industry through the manufacturing process is significant, and arguably, more dramatic than any other industry.

David Vitale from Starward turns $300 per tonne of barley into $40,000 of whisky

Holly Klintworth from Bass & Flinders turns $16K worth of wine into over $1.6 million worth of brandy

You heard from Will Edwards at the Sydney hearings that their partnership with Voyager, they innovated to create Australia's first commercially available native timber-smoked malt, eliminating the need to import thousands of tonnes of peated malt from the UK, and creating a highly value-added Australian grown and made product able to be sold for an approximately 400 per cent premium to the feed barley farmers in the region we previously relied on.

Therefore, we ask the committee to consider:

This can be further supported with:

3 Future workforce and skill needs

Term of reference 6

Expand the opportunities and reach of the National distillers Institute for industry specific training – because there is a distinct lack of industry specific training (rec 22)

Safety courses should be mandatory for new and renewals of licenses (rec 23)

Industry accelerator program (rec 25)

4 Support further innovation and sustainable growth in the sector

Term of reference 7

Freeze the excise to encourage reinvestment (rec 28)

Create a body called Spirits Australia dedicated to promoting Australian spirits, including through marketing, improving regulation, and supporting innovation.

Responsibilities for Spirits Australia could include: