Beer prices likely to rise at Australian pubs as alcohol excise increase looms

Australians could soon be paying more for their pint at the pub, as the hospitality industry feels the pressure of soaring alcohol taxes.

Business owners are pleading with the federal government to take action before its twice-yearly tax hike on alcohol kicks in on August 5.

WATCH THE VIDEO ABOVE: Pub owners claim alcohol tax is putting them out of business

Some owners say they have to charge as much as $18 a pint to keep up with rising costs.

Countless craft breweries have shut up shop recently as the industry feels the brunt of high costs and dwindling customers.

Just last week, Lotus Beer Co, the Geelong craft beer company behind Valhalla Taproom and Valhalla Brewhall, entered voluntary administration blaming skyrocketing operational costs and a dramatic down-tick in demand caused by cost-of-living pressures.

Businesses have long been calling for the beer excise to be frozen to safeguard the industry’s future.

Limerick Arms manager Zuzana Belejova said the increase would mean businesses would eventually have to put the prices up.

“We try to keep it as low as we can but it’s hard to maintain with the tax going up twice a year,” she told 7NEWS.

“It’s not like we’re making the money, we’re just trying to cover our costs.”

Industry struggling

Belejova said households were clearly struggling under rising cost-of-living expenses.

“You can tell people can’t afford to go out as much as they used to,” Belejova said.

“The cost of everything is hard for them to keep up.”

Belejova called on the government to help businesses and change the way the excise was applied.

“It’s just automatically going up,” she said.

“Businesses are struggling ... I think it needs to be a whole picture, not just ‘let’s put the taxes up’.”

The embattled beer industry has been hard hit, with multiple breweries closed nationwide in recent months.

Sydney’s Malt Shovel Brewery, where popular beers by James Squire and Little Creatures are produced, last month revealed it would shut down in August due to cost-of-living pressures.

Sou’West Brewery in Torquay, on Victoria’s Surf Coast, entered administration in May, the same month Melbourne craft brewery Deeds Brewery closed its doors after failing to find a buyer during its two-month-long administration.

Several other Victorian breweries have entered administration, including Hawkers — which has since successfully emerged after approving a financial restructuring — Deeds Brewing and Dainton Brewery.

Queensland brewer Black Hops, with several venues, also entered voluntary administration in March; Perth’s Golden West Brewing Co closed its doors in late-February; and Sydney beer company Wayward Brewing Co entered administration in January.

Chief executive of the Brewers Association of Australia John Preston said Australia now has the third-highest beer tax in the world. He said it was about time the government stepped in and took action.

“What we’ve been calling for, for a couple of years now, is for the government to take action, which they can do at any time, they can step in and say, enough’s enough ... it’s got to stop,” Preston told 7NEWS.

“We believe they should actually implement some targeted relief, cut the draught beer tax, which is the beer tax that applies only to beer that’s served in pubs and clubs, cut that draught beer tax and give a bit of a relief to beer drinkers going out and enjoying a beer in the pub.”

Cutting the beer tax would not only be a welcome relief for consumers but also struggling pub owners who have been hit across the board with rising costs.

“You know, their wage costs, their utility bills have gone up massively, this is something the federal government can do to just ease that pressure a little bit,” he said.

- With Rory Campbell