The Australian Distillers Association is calling for a halt to bi-annual increases in Australia’s spirits tax, citing barriers to the industry’s growth.
This push comes following new economic modelling released by research firm Mandala, which was commissioned by the Australian Distillers Association (ADA) and Diageo Australia.
According to the report, the industry currently supports 5700 jobs in manufacturing, with almost half of the country’s 701 distillers located in regional areas. Additionally, the sector attracts 631,000 visitors annually, making distillery visits one of the fastest-growing tourist activities for overnight domestic visitors in the country.
Paul McLeay, chief executive of the ADA, expressed the significance of Australia’s spirits tax on the industry’s competitiveness and its ability to attract investment.
“This report proves what distillers right around this country already know, that Australia’s spirits tax has significant implications for the competitiveness of the spirits industry and the ability for distilleries to scale and attract investment,” he continued.
The report suggests that freezing twice yearly increases to Australia’s spirits tax and establishing a ‘Spirits Australia’ body to support industry growth could help the Australian spirits industry reach a $1 billion export market by 2035.
Dan Hamilton, MD for Diageo, added that while the spirits industry has “enormous potential”, the report demonstrates that current policy settings are limiting its growth.
“Our consumers, who have to pay $38 in tax for every 1-litre bottle of Bundaberg Rum, know this tax is not sustainable,” explained Hamilton. “Now, this report makes it clear that it’s also limiting the foreign direct investment which could drive industry and export growth.”
The industry’s call for policy changes comes as it seeks to address the disparity between its export potential and its current standing in the global spirits market.
