A brewery owner has criticised the impending rise in excise duty on beer and the rising costs of running a business in Australia.
Sauce Brewing Co founder Mike Clarke said: Yahoo The industry was suffering “on all sides” and some companies were unable to stay afloat and were forced to close.
“Excise taxes increase every six months, as they always do,” he said.
“But there are also the other costs of doing business that are actually rising faster than inflation: the cost of goods, wages, property taxes, transport, fuel, electricity and gas.”
The excise duty on beer will rise for the second time this year on Monday, giving Australia the third-highest beer tax in the world.
The beer tax is determined based on alcohol content and type of packaging and applies to brewers and distillers.
This year alone, 20 Australian independent breweries have closed, entered voluntary administration or restructured due to these crushing pressures.
Mr Clarke has already sacrificed a lot to keep his microbrewery running and sold his house and went “all in black” to launch his business in Sydney in 2016.
Sauce Brewing Co founder Mike Clarke (pictured) said the industry was suffering “all over the place”.
Mr Clarke added that the industry is also being affected by the cost of living crisis, with Australian beer lovers not spending as much as they used to.
He said his brewery is practically absorbing the cost increase as it is not “realistic” to continue raising prices for its customers.
Mr Clarke said he has tried to future-proof his business and deal with the “ups and downs” of the industry by diversifying.
Six months ago, the company launched Twizzle Cocktails, ready-to-serve cocktails in cans.
Joel Meaney, operations manager for Dad & Dave’s Brewing, said they are also enduring the increased costs rather than raising prices for their already struggling customers.
Mike Clarke said the industry is also being affected by the cost of living crisis, with Australian beer lovers not spending as much as they used to (file image)
He said this latest tax increase is the fifth in two and a half years and the tax represents about a third of the price of each beer they sell.
Meaney said the price of a beer has risen from $10 to $14 in just two years.
“We’re doing our best to stay as true to Australian culture as possible while still making it possible for people to get together and have a glass of beer,” he said.
Mr. Meaney added that his brewery is trying to offset rising costs by installing a food truck and holding trivia nights and live music at its location.
The federal government bases any beer tax increases on the Consumer Price Index (CPI).
The CPI rose by 3.8 percent annually in the June quarter.
There have been calls for the government to scrap the increase in beer tax.
The Brewers Association has spoken out and the Australian Hotels Association is calling for the spirits tax to be cut.