Breweries in the North East are not entirely happy with Treasurer Scott Morrison for suggesting craft beer could be cheaper due to a tax cut.
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The 2018-19 federal budget will include an extra $70,000 in excise tax rebate, up from $30,000 to $100,000, and a lower excise rate for small kegs.
Up until now, beer in kegs smaller than 48 litres was charged more tax than bigger kegs often used by big companies.
“The extra help to craft brewers and distillers will drive competition in a sector currently dominated by large domestic and multinational brewers, opening the door to new products,” Mr Morrison said.
“It raises a very tantalising prospect for Australians: the likelihood of cheaper craft beer.”
Grant Jones from Malt Shed in Wangaratta said he was pleased to see moves towards equalisation in the beer industry, but taxes were just one of many financial challenges faced by small businesses.
“We think the treasurer’s statement on cheaper beer isn’t always right,” he said.
Malt Shed is a member of the Independent Brewers Association, which had been leading the charge for fairer taxes.
Mr Jones said the brewery, which produced some beer on site and some at other locations, was part of creating a bigger tourism industry in the region.
“The consumers are marching with their feet in a way,” he said.
“We want to create a place in Wangaratta for people to come and have beer from Wangaratta.”
Bright Brewery operations manager Rupert Shaw said the tax cuts could free up funds for other parts of the business, such as marketing.
“It’s overall positive, any reduction in cost is a good thing,” he said.
“It may lead to some cuts in price, but independent brewers have higher costs anyway.”
The ability to produce 20 or 30-litre kegs was also a positive for Mr Shaw, who said the larger kegs which previously attracted the tax cuts were difficult to handle.
“Not everybody can actually lift them,” he said.
“That should enable us to start to push these (30-litre kegs) into smaller venues because it’s more economical.”
The next challenge for independent brewers will be challenging the contracts for taps at pubs, which are dominated by beer from the bigger corporations.
