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“The Federal Government’s own data is starting to bear out the folly of this outdated excise regime,” he said.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

The early bird registration discount for ADI's 2024 International Spirits Competition will end in about two weeks on February 2, 2024. As a reminder, as members of the Australian Distillers Association you can also save an additional $100/spirit when you use the discount code 2024ADA.

Note: Any spirits not yet imported into the US will need to complete a free FDA Prior Notice and our free COLA Waiver application, details of which will be provided after registration.

Members can find all the details about the competition by following the link below.

International Spirits Competition

Members would be aware that the Australian Distillers Association is in the process of reviewing the Rules and Constitution of the Association. This is hoped to be finalised early next year and presented to members at this time for your consideration.

In light of the impending proposed changes, the Annual General Meeting will be held early next year. At this time, we will produce an annual report that covers the highlights of this year and the challenges for the year ahead.

New Vice President

At the December Board meeting of the Australian Distillers Association, Cameron Syme resigned as Vice President and a member of the board. The Board thanked Cameron for his 20 year contribution to the industry and his passion and commitment to the category.

The board filled the vacancy with David Vitale. David is the Founder of New World Whisky Distillery (Starward). For nearly two decades David has been at the forefront of the global craft spirit movement building Starward into one of the most internationally recognised New World whisky brands. Having lived in America for the last 4 1/2 years, David is a huge advocate for Australian craft spirits abroad, and the unique opportunity Australian distillers have on the world scale.

David Vitale, Vice President with CEO, Paul McLeay

Thank you to Members who have engaged with their local MP. The most effective voice we have is when local distillers engage directly with your local representative. Many members have written to their MP or invited them to their distillery. This is the most important part of our campaign for fair and sustainable tax reform.

Hon. Richard Marles MP, Deputy Prime Minister (at time of his visit, he was Acting Prime Minister) visited Anther Distillery in Geelong with a group of Australian Distillers from Victoria.

The meeting provided a great opportunity for the industry to brief the Acting Prime Minister on the challenges and opportunities facing the industry, within the physical context of a working distillery. 

On 15 November, the CEO met with Brian Mitchell MP & Senator Perin Davey, the co-convenors of the Parliamentary Friends of Australian Spirits group to discuss options for Parliamentary Friends group functions when Parliament resumes in 2024.

On 21 November, Spirits & Cocktails Australia convened a group of members and representatives of Australian Distillers to participate in a policy briefing with the Minister on the industry’s trade and tourism potential. Participants included Will Edwards (Archie Rose), Satya Sharma (Lark), David Vitale (Starward), Cameron Mackenzie (Four Pillars) and Steven Magarry (Sydney Rum Company). The meeting was held at the Archie Rose manufacturing plant in Banksmeadow. 

Also on 21 November, the CEO attended an event for SA Labor, which was funded by SCA. The event was co-hosted with Distillers South Australia and attended by Nicole Lestal from SCA and distillers from Never Never, Imperial Measures, Seppetsfield Road and 5Nines Distilling. The guests of honour included the SA Treasurer and Attorney-General. 

The Royal Agricultural Society of NSW (RAS) will venture into the world of distilled spirits for the first time since 1981 next year as it launches its inaugural stand-alone Sydney Royal Distilled Spirits Show.

Under the guidance of Australian drinks industry veteran, Stuart Gregor, the competition will support the growth of the Australian spirits and drinks industry by providing producers with the opportunity to benchmark their products at a national level and go under the tastebuds of some of the best in the business. The Sydney Royal Distilled Spirits Show will join the RAS’ calendar of prestigious wine, dairy and fine food competitions which include the Sydney Royal Wine Show and Sydney Royal Beer & Cider Show.

Set to take place in September 2024 classes will include Brandy, Cane Spirit, Gin, Liqueur, Rum, Vodka, Whiskey, Alternative Distilled Spirits, Non-Alcoholic and a stand-alone Ready to Drink (RTD) class, with fifteen Champion trophies up for grabs.

Taking advantage of SCA bringing State Presidents together for the Parliamentary Inquiry Workshop, State Presidents held an informal catch up to discuss State issues. Weather conditions impacted on the attendance. Presidents agreed the new Constitution and an MoU between the ADA and states was an important and worthwhile project to pursue as soon as practicable because it would lead to increased member benefits.

In November, Australian Distillers President, Holly Klintworth, and Treasurer/Secretary, Stephen Parry met with the Chair of Spirits & Cocktails Australia, to discuss the MOU between the two associations.

Both parties agreed the document is fit-for-purpose but that enhancements could be made to better describe appropriate behaviour and conduct between the parties when embarking on joint activities. The Chief Executive of Australian Distillers and Spirits & Cocktails Australia will prepare a draft annexure to the agreement for approval at the first meeting of each Board in 2024.

Alcohol Beverage Australia held their Annual General Meeting and Council Meeting. The Chief Executive of ABA confirmed that the current Board had been elected at the previous AGM for a period of two years. A presentation was given by the Sydney University PhD candidate, who provided an update on the progress of his research, which is being funded by ABA. Members committed to assisting him with data and review, as needed.

ABA members engaged with the Assistant Minister for Health, Hon. Ged Kearney MP, in response to a media comment regarding possible exploration of cancer warning labels for alcohol beverages. The Minister for Health, Mark Butler MP, has subsequently publicly stated the Government has no intention of pursuing cancer warning labelling.

Digital Best Practice Guide

Approval of a new Digital Best Practice Guide, developed in consultation with a working group of Code signatories was approved by the ABAC board. The Code will now be shared with the Minister for Health by the Department of Health representative on the Management Committee. It is anticipated the Guide will be publicly released in late January 2024.

Hard Solo

The Chief Adjudicator also provided a thorough analysis of the Adjudication Panel’s recent determination on Hard Solo, noting the decision had been well received by media and stakeholders. Concerns from Code signatories regarding Asahi’s conduct in the transition period permitted under the ABAC Rules were raised and the Chief Executive committed to including transition arrangements to the issues paper for consideration by the consultant undertaking the Governance and Operations Review. The determination was circulated to all members of the ADA board the day it was handed down.

Wet Pussy

The Victorian Liquor Commission issued a banning notice for Wet Pussy Shot - refer here.

On 8 September 2021 Ad Standards considered an ad for the product and found it in breach of the AANA Code of Ethics. On 6 December 2021 ABAC made a final determination that the name and packaging of this product was in breach of ABAC standards (sexual success and appeal to minors). The Company did not respond to the final determination and so in accordance with ABAC’s Rules & Procedures, ABAC referred the complainant’s concerns to the Victorian Liquor Commission that month.

There was a considerable delay in the Commission considering this matter (despite regular enquiry from us), partly as the Commission was entirely restructured in 2022.

The Commission has agreed with the findings of both ABAC and Ad Standards and found that advertising and promotion of the Product is indirectly sexual or sexist and therefore is not in the public interest. The ban includes using this name on its labels and on any website used to promote the product.

Deloitte Access Economics was engaged in September by SCA to update the Australian spirits industry’s economic contribution analysis. This study will be a valuable input into submissions and advocacy in support of a Parliamentary Inquiry, and in our continued pursuit of spirits excise reform.

A survey to members of ADA and SCA was co-designed by staff and consultants at Deloitte, with the support and cooperation of the SCA Corporate Affairs Committee and a couple of ADA members. The survey will provide comprehensive insights into spirits production in Australia, employment, value-add to industries throughout our supply chain, and exports. The survey has also been enhanced to better understand the impact of excise on members of each association, availability and access to capital, while also providing insight into business confidence. This information will complement desktop research and analysis completed by Deloitte Access Economics to provide a holistic view of the industry’s economic contribution.

Thank you to everyone who participated in this survey. We know it was challenging and required significant time from your business to complete the data. By taking the time, and effort, you have made a valuable contribution to the industry.