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Beer pain grows By Dongyun Kwon The continual high inflation has hit the drinks industry, one of the main industries across the Yarra Ranges. The Australian Taxation Office looks into the consumer price index (CPI) calculated by the Australian Bureau of Statistics to decide the changes in excise duty on alcohol every six months. In August, it was confirmed the taxes on beer and spirits have effectively gone up two per cent. After 18 consecutive tax increases, beer prices have been rising steeply, with the cost of a pub pint heading towards as much as $18. Hargreaves Hill, a brewery in Lilydale, has gone through a few challenges since its opening in 2004, including the Black Saturday bushfires, when its building was burnt down, and the Covid-19 pandemic. However, Hargreaves Hill director Simon Walkenhorst said the last two years have been the toughest period with a lack of hope for a better future. “In some of those times, there’s been a lot of goodwill in the community because we were all doing it so tough. When we had the bushfires, everybody helped us out a lot, when we had Covid, it was a communal effort from pubs, bars, breweries, suppliers and everything,” he said. “But now as you can see by the number of breweries that have closed or have gone into liquidation or voluntary administration and so forth, the whole industry has found it just impossible to continue. “We’re okay but it has been an extremely challenging time to make sure that we can retain the jobs, continue the employment of our employees and get our beer to customers at the price that they can afford.” Mr Walkenhorst runs the brewery with a philosophy, ‘everything works for everybody’. The reality, that he had to accept that there was no way he could keep the price affordable for his customers, made him more frustrated because it was outside of his philosophy. The brewer said the high inflation over the last three years has increased not only the excise but also every cost for the production of beer including ingredients and packaging. “Brewers have tried to remain competitive by shouldering some of those costs, but it also gets to a point where it’s unsustainable to have brewers wearing all those costs, so inevitably our prices need to go up,” Mr Walkenhorst said.
Hargreaves Hill director Simon Walkenhorst. (Stewart Chambers: 435480) “Now what’s become more difficult in the last couple of years is that the costs of the bars, the pubs and the restaurants, whether that’s wages, rent, electricity, all the overheads of running that business have increased so much as have ours. “And at the end of the row, you’ve got the customer buying either a pint of beer or a six-pack of beer or a four-pack of beer or whatever, and now finding it too expensive because their expenses
have gone up as well. “ Mr Walkenhorst hopes the policy for reducing the alcohol excise will be approved shortly. “[The excise] is another cost in beer, we are the one of the most heavily taxed,” he said. “The issue with the excise is that it goes up by CPI twice a year. “If the excise is reduced, it is going to help the industry.”
There are different excise costs for beer, products with less than 10 per cent alcohol, and then spirits and other excisable beverages with more than 10 per cent alcohol. Wine is subject to a different tax regimen. It’s been five years since Yarra Valley Spirits based in Lilydale hopped into the distillery industry. Continued page 11
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