Australians pay the fourth-highest beer tax in the world. Now a fresh ATO tax hike will make it even worse.

iStockAustralians pay the fourth highest beer tax in the world, according to research from The University of Adelaide.
  • The Australian Taxation Office is set to increase the beer tax in line with inflation, adding to Australia’s already-high beer taxes.
  • Research from the University of Adelaide found Australians already pay the fourth-highest beer tax in the world, after Norway (first) Japan (second) and Finland (third).
  • The study also found that 42% of the cost of a carton of full-strength beer is made up of taxes.

The Australian Taxation Office is set to increase the tax on stubbies, cans and longnecks by 30 cents per litre and 21 cents per litre on draught beer from Monday, adding to Australia’s already high beer tax.

Research from the University of Adelaide found Australians pay the fourth-highest beer tax in the world, followed by Norway (first) Japan (second) and Finland (third).

The study, conducted by Professor Kym Anderson for the Brewers Association of Australia, found that at $2.19 a litre, Australians pay more than three times the average price of packaged beer compared to other OECD and European Union countries, which have an average price of 70 cents.

“It will come as no surprise to Australians who have travelled and noticed the price on a beer overseas compared to what they pay at home,” Anderson said in a statement. “The key reason for the difference is the greater rate of beer tax in Australia.”

The study also found the biggest cost of Australian-made beer is tax, which accounts for 42% of the cost of a carton of full-strength beer. Australians pay around 18 times more beer tax than Germans, eight times more than the US and six times more than Canadians, according to Anderson’s research.

The Brewers Association of Australia CEO Brett Heffernan explained that the beer tax is now due to go up again because of an automatic consumer price index (CPI) increase that happens every August and February.

The CPI is a measure of changes in retail prices of a basket of goods and services,, according to the Australian Bureau of Statistics.

“The simplest way of thinking about the CPI is to imagine a basket of goods and services comprising items typically acquired by Australian households,” the ABS said. “As prices vary, the total price of this basket will also vary. The CPI is simply a measure of the changes in the price of this basket as the prices of items in it change.”

Heffernan said the beer tax is “already a hefty tax at $2.19 per litre for packaged beer”.

“The CPI increases may not sound like much, but these six-month Government increases in beer tax are really adding up. Tax is already the biggest cost in the price of an Australian-made beer, accounting for almost half (42%) of the price of a typical carton of full-strength beer.”

“Along with Norway, Japan and Finland, Australians pay the highest beer tax in the world. We then pay another 10% in GST, including GST on the beer tax itself, at the retail end.”

Heffernan said calls for freezing the bi-annual CPI hikes “just won’t cut it”.

“All that does is lock-in the unreasonably high taxes Aussies are already paying,” he said. “Only by addressing the rate of beer tax, which is way out-of-whack with the rest of the world, can Australians get the relief they deserve.”

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