The Australian Distillers Association and Spirits and Cocktails Australia applaud the Morrison Government’s decision to increase the excise refund cap for small distillers and brewers from $100,000 to $350,000 per year as part of the 2021-22 Federal Budget.

This initiative will deliver much needed assistance to more than 300 craft distillers, most of whom are based in rural and regional areas, and also represents a promising first step towards unleashing the potential of the Australian spirits industry.

Australian Distillers Association president Stu Gregor said: 

“This decision provides much needed relief for hundreds of craft distillers around the country that were severely impacted by COVID-19. It means craft distillers will have more capital available to help their businesses grow and to employ more locals – bringing important economic benefits through job creation, expanding farm production, regional tourism and hospitality for our communities.

“We have great ambitions to grow Australia’s world-class distilling industry and this is a great first step that will help the industry to grow.”

Spirits and Cocktails Australia chief executive Greg Holland said:

“The best alcohol tax system is a fair one, so we thank the Government for bringing the tax incentives offered to small distillers and brewers into line with those offered to small wine makers.

“However, we note that Australia’s alcohol tax regime remains fundamentally flawed and unfair, imposing a spirits tax that is already ten times higher than the US rate, and 68% higher than New Zealand’s, with further increases every six months.

“We look forward to continuing to work with the Government toward a fairer and more sustainable spirits tax regime – one that aligns spirits tax rates with brandy, and freezes CPI increases – to create jobs, investment and export opportunities in a burgeoning Australian industry.”

Australia’s distillers have welcomed cross-party support in federal parliament for urgent action on this country’s spirits tax regime, now the third highest in the world.

A motion calling for spirits tax reform was moved in the House of Representatives on Monday night by Tasmanian Independent Andrew Wilkie (the member for Clark), and seconded by South Australian Independent Rebekha Sharkie (Mayo).

Coalition MPs Bridget Archer (Bass) and Tim Wilson (Goldstein) and Labor MPs Brian Mitchell (Lyons) and Patrick Gorman (Perth) also spoke passionately in support of the motion.

The Australian Distillers Association and Spirits and Cocktails Australia applauded the members for their support of their industry, which now employs more than 5,000 Australians and supports another 15,000 jobs indirectly.

The organisations welcomed the growing recognition among federal MPs of how the unfair spirits tax is holding back a promising Australian industry, as captured in the members’ speeches on Monday night:

“Tasmania's boutique distillers in particular desperately need this tax reform and some may sink without it… It is clear that current spirit taxation is a huge barrier to locally-made craft spirits, achieving success nationally and in overseas markets.” – Andrew Wilkie, Member for Clark “We are taxing the lifeblood out of this industry, and this industry will not flourish. The government says it's a government for low taxes and believes that, by lowering taxes, we stimulate the economy.

Well, this is a prime example.” – Rebekha Sharkie, Member for Mayo

“I believe an opportunity exists to look at reducing the current rate of the spirits excise, even by a moderate amount, which would provide our distillers with the confidence to reinvest in their businesses and create further jobs in the hospitality and regional tourism industries, two industries that were hardest hit by the pandemic.” – Bridget Archer, Member for Bass

“It's a space where we as a country do it so differently to everybody else, which gives us an incredible product position. But there's one thing that's holding us, like the entire country, back: we desperately need tax reform, tax reform, tax reform.” – Tim Wilson, Member for Goldstein

“When wine taxation was reformed, it led to an explosion in the industry. It just blossomed. That's what we want to see happen with spirits.” – Brian Mitchell, Member for Lyons

“We talk about bringing back manufacturing to Australia. The distilling industry is manufacturing, and we should do what we can to support it. It's exactly what Australians want: quality jobs, value added, export-ready.” – Patrick Gorman, Member for Perth

The Australian Distillers Association welcomes the Andrews Government’s announcement yesterday to invest $10 million in distillery door grants over the next two years.

This investment will directly benefit the 104 distilleries located throughout Victoria, who buy produce from local farmers, attract tourists to the regions, and create jobs, both within their own operations and in the services and supply chains.

Chris Pratt, Australian Distillers Association Victorian spokesperson and owner of Kilderkin Distillery in Ballarat, said:

“This is wonderful news for Victorian craft distillers. We will be able to invest more in our distillery doors to encourage more people to sample Victorian spirits and enjoy a unique and innovative distillery experience leading to further employment opportunities in Victoria.

“We are very pleased the government has recognised the contribution of the craft spirits industry to the Victorian economy, especially in regional areas where many distilleries are based. We thank the Andrews Government for their ongoing support.”

Dave Irwin, President of Spirits Victoria Association and owner of Patient Wolf in Southbank Melbourne, said:

“This is a great result for Victorian producers and consumers. This significant grant program will help to grow a burgeoning spirits industry. Spirit producers will be able to employ more people and positively impact the farmers and businesses that support them. More distillery doors will mean more consumers get to experience innovative products created by passionate people, and will enrich local tourism offerings.”

Holly Klintworth from Bass & Flinders in Dromana, who has been operating a cellar door since 2014, said:

“We get 20,000 visitors to our distillery door every year and with this grant we hope to use the funds to reinvest into additional resources to improve our visitor experience. This announcement will drive more people to the Mornington Peninsula.”

Russ Watson, founder of Bellarine Distillery on the Bellarine Peninsula said:

“We have a vibrant cellar door. Everything is made on the premises. This is going to help us develop what we have on our property. We have plans to build a new distillery and this will go a long way to making this happen sooner. This announcement will create jobs.”

Stu Gregor, President of Australian Distillers Association and co-founder of Four Pillars in Healesville, said:

“The announcement from the Andrews Government will mean more jobs for Victorians – especially in the regions and importantly, jobs that people will love. Craft distillers are passionate about the innovative and world class products they make.

“The ADA looks forward to working with the Andrews Government to ensure the program meets its stated objectives of supporting local jobs and investment in a financially responsible and sustainable way.”