SA Craft Brewers, Distillers elevate a glass to eat the bonus

0
108
SA Craft Brewers, Distillers raise a glass to consume the bonus

Flinders questions are being revised as doctors condemn solutions piecemeal


Port’s AFLW team invited action against Crows in 2023


Your views: on QR codes, heritage, and creative writing


Research funding ax frustrates SA universities affected by pandemics


US $ 3 million grant to start studies with SA COVID vaccines in humans

South Australia’s growing number of craft brewers and distillers says a dramatic spike in excise tax rebates, pocketing an additional $ 250,000 a year, is a game changer that will boost jobs, production and focus on exports.

Big Shed Brewing co-founders Jason Harris and Craig Basford say the increased excise tax rebate will help them boost exports. Photo: John Kruger

Beginning July 1, brewers and distillers will receive a full excise tax refund up to a maximum of $ 350,000 per year.

The excise duty cap was originally raised from $ 30,000 to $ 100,000 for beer and liquor manufacturers in July 2018. However, the recent cap increase to $ 350,000 is in line with the cap on winery discounts under the federal government’s Wine Equalization Tax (WET) system.

The excise duty on beer depends on the strength of the beer and the size of the container in which it is packed. It’s about $ 18 per carton of 24 cans (375 ml) of 5 percent ABV beer.

The excise duty on beer in kegs is around 30 percent lower than on packaged products. This is an advantage for manufacturers who can secure taps in pubs or sell their beer as part of their own on-site operation.

There are more than 60 independent SA beer brands and 20+ production breweries, plus dozens of artisanal liquor manufacturers.

The co-founder and CEO of Prancing Pony Brewery, Corinna Steeb, is the South Australian representative on the board of the Independent Brewers Association.

She said the additional $ 250,000 in tax break was “a game changer” and something the IBA had fought against for seven years.

“For us, it will allow us to reinvest money production efficiency, product innovation and employment, because even though independent breweries account for only 8 percent of Australia’s total beer production, we still employ more than 50 percent of the people in the industry. Employment costs are likely second highest cost to a brewery after excise duty, ”said Steeb of the benefit to their Adelaide Hills brewery.

“Prancing Pony employs 28 people in the brewery and in front of the house. We’re looking for two people as we speak. This helps me develop a little more confidence in actually recruiting those people.”

Corinna Steeb, CEO of Prancing Pony. Photo: Andrew Spence

Ryan Davidson, co-founder of Little Bang, founded the Stepney Brewery with Filip Kemp in 2013. The WET program has changed the wine industry since its inception in the 1990s, and recent excise tax concessions have the potential to do the same for craft beer.

“With taxation alone, they managed to move the Australian wine industry from a dark backwater to one of the best in the world, and after all, we are now much more in tune with that wine industry policy,” he said.

“This relieves small producers who do not have the economies of scale of the larger companies and brings them on a level playing field.

“The beauty of it is that you know that small businesses are going to take every dollar of those tax savings and get straight back into the economy by buying equipment, buying services they couldn’t previously afford, and only businesses will will drive harder. ”

Big Shed Brewing Concern opened its new brewery in Royal Park in December 2019 and has reached about half of its capacity of 1.2 million liters per year.

Co-founder Craig Basford said the $ 250,000 surge would help pay off the new brewery and also invest in processes that will allow it to expand exports.

Exported beer is exempt from excise duty, but investing in equipment to make long-life beer that could be shipped without refrigeration would reduce freight costs.

Big Shed recently sent its first full shipping container with around 600 cases of beer to the Netherlands, where it will be distributed across Europe.

Basford said using the discount to invest in pasteurization equipment would help boost exports.

“It will allow us to bring products from South Australia to the rest of the world as they currently need to be kept refrigerated in order to achieve the level of quality we want,” he said.

“Obviously, cooling products from here to Europe is not only expensive, but also causes high CO2 costs.

“The European market came to us and that’s why we’re going there first – Asia is probably our next coast to conquer.”

The founder of the Adelaide Hills Distillery, Sacha La Forgia, wants to use the increased discount to invest in his employees.

For distillers, the excise component of a 700ml bottle of 40 percent ABV spirits is nearly $ 25.

Sacha La Forgia, founder of the Adelaide Hills Distillery, said its operation at Lot 100 near Nairne is nearing capacity and the additional discount would allow greater investment in people.

The distillery already exports gin and whiskey to eight countries in Europe, Aisa and North America and will now continue to invest in these markets.

“Some of the people we get are sure to be export-oriented,” said La Forgia.

Get InDaily in your inbox. Every day. The best local news every working day at lunchtime.

Thank you for subscribing to the InDaily newsletter.

“The export is fun, you don’t just send it to the port and forget it, you have to activate the market just as you do here. So if you have sellers here, you also need them on the export market.

“If that’s part of your strategy, you can put that $ 350,000 straight into activating export markets and increasing sales instead of just mailing it off and hoping for the best.”

Never Never Distilling, based in McLaren Vale, wants to use the extra money to expand production and employ more people.

Co-founder Sean Baxter said the craft liquor market is very difficult to enter and access to the additional discount is critical for many small producers.

“Everything from the labels to the corks, the liquid to the tax you have to pay for it costs so much, and there is a lot of competition with huge importers importing spirits that are incredibly cheap,” he said.

“There is so much room for growth and the government sees the potential to invest in these small artisanal distilleries across Australia and it is an amazing initiative to see it.

“We’re incredibly excited because it will allow us to expand our productions, employ more people, and effectively do better business.”

– Additional reporting by Elisabeth Marie

Local news affairs

Media diversity is threatened in Australia – nowhere more than in South Australia. The state needs more than one vote to move it forward, and you can help with a donation of any size to InDaily. Your contribution goes straight to helping our journalists uncover the facts. Please click below to contribute to InDaily.

Contribute here

Supported by
PressPatron