Oz: Rising costs create uncertainty for Australia’s breweries

Brewery owners are calling for more government support as rising costs force craft brewers to shut up shop around Australia.

The situation has affected many smaller operators, including Black Hops Brewing on the Gold Coast, which was previously close to liquidation.

Now industry veteran Nick Boots is trying to build it back up despite tough times.

“Everything involved in the business is going up exponentially from 10, 20, 30 per cent in some cases,” Boots said.

One of the country’s largest craft brewers, Capital Brewing Co, has also felt the pressure in recent months.

“Our costs have risen almost out of control,” co-founder and managing director Laurence Kain said.

“Our electricity bill has gone from $4500 a month to almost $12,000 a month over the last two years.”

Since before the pandemic, prices for materials and production costs used to make beer have all spiked.

High inflation means the alcohol tax has also gone up.

Indexed twice a year, beer excises have gone up by almost 8 per cent in the past 12 months, 17 per cent since the pandemic.

“44 per cent of the cost of your beer is excise tax,” Kain said.

Kylie Lethbridge from the Independent Brewers Association said this is the third highest beer taxation in the world.

“The federal government are the ones that can help,” Lethbridge said.

Rising costs are forcing many of the industry’s close to 700 brewers to the wall.

“I’ve gotta say it does feel at the moment that the government uses the industry as an absolute cash cow,” Boots said.

“I would suggest we’ve probably lost 5 per cent, but there’s nothing stopping another 20 per cent of that 700 going by the wayside if there’s not some significant change.”

Breweries are calling on the government to change taxes in order for them to lower rising costs and the price of a beer.

A government spokesperson said this is the “usual, legislated, automatic indexation change”.

“We listen respectfully to ideas but these have to be weighed up against other priorities and within the budgetary constraints,” the spokesperson said.