Tax relief plan for small brewers and distillers announced

Small brewers and distillers could receive support in the form of a tax rebate unveiled by the government as part of the 2021–22 Budget.

The government said the $255 million in tax relief is designed to support more jobs and open investment opportunities in the fast-growing sector.

Under the plan, small brewers and distillers could benefit from a tripling of the excise refund cap for small brewers and distillers from $100,000 to $350,000 per year.

Eligible brewers and distillers will be able to receive a full remission of any excise they pay, up to an annual cap of $350,000 from 1 July. Currently, eligible brewers and distillers are entitled to a refund of 60% of the excise they pay, up to an annual cap of $100,000.

This will align the benefit available under the Excise Refund Scheme for brewers and distillers with the Wine Equalisation Tax (WET) Producer Rebate.

Independent Brewers Association (IBA) Chairman and founder of Sydney-based Wayward Brewing Co Peter Philip said the announcement is welcome news for the industry.

“Until now, about $0.42 in every dollar of independent brewer revenue has been remitted in some form of federal tax. Excise tax is the single largest component of the cost of making a litre of beer, and it’s one of the highest beer taxes in the world,” he said.

“With this change, small brewers will be able to invest more in people, equipment and facilities to meet growing demand.”

There are around 600 brewers and 400 distillers across Australia, with around two-thirds operating in rural and regional areas.

“Australia’s independent brewers grew by 15% in 2020, despite the beer market declining by 1.7% overall last year,” Philip said.

“This new incentive will accelerate the resurgence of an Australian-owned beer industry, while giving consumers more home-grown choices.”

Image credit: ©stock.adobe.com/au/Artem Shadrin