*Pic: Whisky distiller William McHenry
AUSTRALIANS may have to go overseas to buy the country’s best spirits as craft distillers crying for a Budget tax break find an upside in exporting to low-excise countries.
Tasmanian Whisky Producers Association secretary William McHenry said he was about to export pallets of whisky to Japan.
“I don’t have to pay any excise,” he said.
“Why would distillers supply the local market when it costs them so much more.”
Mr McHenry, of McHenry Distillery, said the tax on a bottle of whisky in the US was about $US2 compared to $A24.30 for the same bottle in Australia.
Already wine and craft beer makers get a tax break, and after years of lobbying the fast-growing number of craft distillers are expecting a rebate in Tuesday’s Budget of about 60 per cent for the first $100,000 exise paid.
That will however only be considered an interim step in progress toward a total reform of the taxing of alcohol, also expected to be progressed in the Budget.
The distiller’s ultimately seek a volumetric alcohol tax where each standard unit, or drink, of alcohol is taxed at the same rate.
Stuart Gregor chairman of the Australian Distillers Association (ADA) said he has put this “modest ask” to government on behalf of the industry of small to very small businesses playing in a global market.
Mr Gregor, of Victoria’s Four Pillars Distillery, sold his 700ml gin in Australia for about $75 after paying tax.
In America his 750ml gin bottle will retail for $US35 because the US tax component is so small.
“It’s much more profitable for those with limited supplies, it makes much more sense, to sell off-shore,” he said.
Currenty there is a mess of diferent excise categories and taxation systems that result in a standard drink of cask wine being taxed at 5 cents and whisky being taxed at $1.04, ADA figures show.
Australia says the country paid $6 billion in alcohol taxes last year, the figures show.
Tourism operator Brett Steel, of Drink Tasmania Premium Tours, benefits from the viability of the 15 or so distillers his company can visit in southern Tasmania.
He said a tax break for distillers would allow them to grow their businesses and emply more people.
“We will see faster production growth rates and investment in tourism ventures for each distillery business, allowing them to capitalise on this growth market and demand of product,” he said.
Tasmanian federal Liberal MP Eric Hutchinson has by a long shot got more distilleries in his electorate of Lyons than any politician in the country, with 14.
He’s been out barracking for a distillers’ tax break and met with Assistant Teasurer Kelly O’Dwyer on a recent low-key visit by her to Tasmania.
“We can be working towards reform more broadly in the way that alcohol is taxed but in the meantime the thing that could support the distillers is a rebate structure akin to the wine industry and the brewing sector,” he said.
Mr Hutchinson said he had made a compelling case in-person to Ms O’Dwyer.
“I think Assistant Teasurer O’Dwyer recognises the growth opportunity and the value of the distilling industry, not only in terms of the product and the econmic activity they generate but also the benefits to the tourism industry.
“And I think she also acknolwedges there is an inconsistency, some might say inequity, between support for wine producers and brewers when compared to distillers.
“I think I made that point clear and she understands that.”
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