Cost of beer about to go up as six-monthly excise kicks in Australia

Cost of Beer Set to Rise as Six-Monthly Excise Tax Increase Kicks In Australia

Beer lovers across Australia are bracing for a price hike as the six-monthly excise tax increase takes effect. This change, which impacts the cost of beer, is part of a regular adjustment to excise rates imposed by the government, and it’s expected to leave many Aussie drinkers reaching deeper into their pockets.

What is the Excise Tax?

An excise tax is a form of indirect tax imposed on goods like alcohol, tobacco, and fuel. In Australia, the government applies this tax to alcoholic beverages, including beer, which increases the price consumers pay at the counter. This excise is adjusted twice a year, in February and August, in line with inflation and the Consumer Price Index (CPI).

How Much Will Beer Prices Rise?

The February 2025 excise adjustment is expected to add approximately 2.4% to the price of beer. For an average carton of beer, that could mean an increase of $1 to $1.50. While this might seem small on an individual basis, it’s a considerable bump when multiplied by the thousands of cartons purchased by pubs, bars, and restaurants, which could pass on these higher costs to their customers.

Impact on the Beer Market

This regular rise in excise rates is a major factor in the ongoing price increases for beer. Brewers, especially small and independent craft breweries, may struggle to absorb the cost increases, potentially leading to higher prices for their beers. While larger breweries may have the capacity to absorb some of the costs, even they will likely need to pass on a portion to customers.

Consumers aren’t the only ones affected. Pubs, bars, and clubs may also feel the pinch, as their operating costs rise, forcing them to reassess pricing models to stay profitable. Ultimately, this could lead to higher costs for those enjoying a cold one at their local watering hole.

The Broader Picture: How Excise Tax Affects the Industry

Excise taxes have long been a point of contention within Australia’s alcohol industry. While some argue that these taxes serve to curb alcohol consumption by making it more expensive, others claim that the rising excise burden disproportionately affects small businesses and hard-working Aussies who simply want to enjoy a drink.

At the same time, these taxes contribute a significant amount of revenue to the government. According to recent reports, the Australian government collects billions of dollars each year in excise, which funds public services and infrastructure.

What Can Beer Drinkers Expect?

In practical terms, Australians can expect slightly higher prices at bottle shops, pubs, and supermarkets starting this month. While a $1 to $1.50 increase may not seem like much on a single carton or pint, the cumulative effect over time will likely lead to a noticeable rise in the cost of regular beer purchases.

For fans of craft beer, the price hike could be especially challenging. Smaller breweries are often more sensitive to changes in excise rates, and many could find it difficult to absorb these increases without adjusting their retail prices. Drinkers may need to consider supporting these businesses by seeking out local brews and finding value in the uniqueness of small-batch beers.

Final Thoughts

As the six-monthly excise hike takes effect in February 2025, Australian beer drinkers can expect to see prices rise across the board. Whether you're sipping a schooner at your local pub or stocking up for a weekend barbecue, it's clear that the cost of beer will continue to climb. For regular beer drinkers, staying informed about excise tax changes and adjusting expectations around pricing is the key to navigating the growing cost of enjoying a cold one.

So, while the price of your favorite beer may rise, remember: it's all part of the regular ebb and flow of the Australian alcohol market! Cheers to a new year (and slightly more expensive beers)!