For a mortgage owner in their 40s, it’s like showing up as a kid with pocket money in a big candy store to run a craft beer department.
- Stakeholders believe that the future of craft beer makers lies in “breweries” rather than packaged beer
- The number of Australian breweries has risen to 600 after dropping to just 19 in the 1980s
- Small breweries are expected to use the state excise tax rebate to pump profits back into their businesses
The choice is overwhelming, the flavors seem to be getting fancy and I can’t afford what I want.
Welcome to Australia’s craft beer industry of 2021, a high-priced market saturated with new players, a bucketload of hops and, more recently, a convergence of candy and beer with offerings like orange chocolate and sourberry beer.
Independent Brewers Association (IBA) chairman Peter Philip said the Australian market has become “very competitive” as it has exploded to more than 600 independent brewers in the past decade.
“There is not the demand capacity for another 100 brands of beer and it is very difficult to get shelf space,” he said.
“I’m not saying that there is no place for good products, but it becomes quite difficult to stand out.
“How many pale ales are there out there?”
IBA Chairman Peter Philip wants a small brewery pub in every Australian town of 10,000 people.
Delivered: Peter Philip
The future of brewers
Experts believe the number of brewers – and perhaps the percentage of attention-grabbing flavors – will continue to rise after the federal government increased its excise tax rebate for brewers and distillers this year.
Starting July 1, they can claim 100 percent of excise taxes up to a limit of $ 350,000 after previously claiming 60 percent up to a limit of $ 100,000.
But instead of increasing competition for shelf space in bottle shops, the IBA sees the course for a new era of beer tourism.
“The majority of young people who want to start a brewery now are looking at the brew-pub model because how many abandoned or closed old pubs are there in cities across Australia?” said Mr. Philipp.
Breweries operated from licensed locations are the future for craft beer, according to the Independent Brewers Association.
Delivered: ATG Publicity
He said small town pubs could be used by independents to brew their beer and serve it over the counter to tourists arriving specifically to try it.
“Then you get three towns around it that do the same thing and create a little beer trail,” said Mr Philip.
“Just look at SA’s Barossa in Hahndorf, places like Prancing Pony, they attract a fair amount of people for beer tours.
“It used to be wine tourism. Today it is beer tourism.”
The popular Uraidla Hotel in the Adelaide Hills has an adjoining brewery with local branding.
Past trends are reappearing
The abundance of brewers could be seen as a return to shape for Australia, which had only 19 breweries in 1984 after peaking at more than 200 in the late 19th century.
According to a 1999 study by Southern Cross University historian Brett Stubbs of the decline in NSW breweries, which along with Victoria always held the lion’s share of breweries in Australia, that decline could be related to three main factors.
One factor was that brewers “bind” customs officers to their products in order to withstand the abstinence movement and the increasingly restrictive licensing laws.
It was also due to emerging technology that delivered larger volumes of brewing with increased economies of scale and taxes such as colonial and later state excise taxes.
NSW’s Tooth and Co controlled at least 350 hotels in Sydney in the early 1900s.
Delivered: Noel Butlin Archives Center, Australian National University
Dr. Stubbs, now an independent scientist, has closely watched the changes in the brewing industry over the past few decades.
He said the number of breweries in the country had risen again during this period and had increased “spectacularly in recent years”.
“It can be safely said that the total number of breweries operated in Australia exceeded 300 for the first time in 2016,” said Stubbs.
High taxes and high prices
Australian brewers pay 0.42 cents excise duty on every dollar of sales, one of the highest beer taxes in the world, and indexed every six months.
The federal excise tax has an ongoing impact on beer prices. (
ABC Radio Adelaide: Malcolm Sutton
This is reflected in beer prices, which have risen higher and higher over the past 20 years, with only the larger breweries able to benefit from economies of scale that help keep prices palatable.
Mr Philip said the tax rebate likely wouldn’t lower craft beer prices, but it would level the playing field for independent breweries, which employed about half of the beer industry’s 15,000 people, even though they only used about 8 percent of their product delivered.
“If it’s a premium product, it’s handmade and costs more,” he said.
“But that extra $ 250,000 [in tax relief] is the difference between being able to hire two extra people, hire a brewer, and god forbid the owner could even pay himself, which is quite unusual for a small brewery. “
Brewers meet at the festival at
More than 70 brewers from all over the country will be showcasing their wares at the Beer and BBQ Festival in Adelaide this coming weekend.
South Australia has the strongest contingent due to its location, but a strong contingent is also listed in Victoria and New South Wales – COVID-19 restrictions are pending.
Brad Reid of Six Twelve Brewing will use the excise tax rebate to invest in the brewery.
Delivered: Brad Reid
Among them will be Six Twelve Brewing in Adelaide, which will operate its own licensed venue in northeast Adelaide after opening in December 2020.
Chief brewer Brad Reid said the discount increase meant more equipment could be bought to meet growing demand.
“It also means that shortly we will actually be able to hire people, get jobs in our local community, and take some of the stress out of two people running an entire company,” he said.
He said their cost was still too high for the discount to change beer prices immediately, but believed they could come down in the long run.
The Beer Bod competition will be part of the entertainment at the Beer and BBQ Festival.
Delivered: ATG Publicity
The business expansion is exactly the result that Federal Treasurer Josh Frydenberg was aiming for with the tax break.
“There are around 600 brewers and 400 distilleries across Australia, with around two-thirds operating in rural and regional areas,” he said in May.
“The announced changes will allow these brewers and distillers to keep more of their income, which will help them invest, grow and support around 15,000 Australians currently employed in the industry.”