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Tax on cheap imported beer

Discussion in 'Off Topic' started by Gnomebrewer, 19/5/19.

 

  1. Gnomebrewer

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    Posted 19/5/19
    I was talking to someone about alcohol taxes this morning, and got to thinking about cheap imported beers. As most who've gone to a bottleshop looking for a cheap lager would know, imported macro lagers are now often cheaper than Aussies. In particular, at the moment I can get 'Tun Bitter' at $30 for a 30 can block. How can they do it? Do they get a tax rebate, or pay less tax than Aussie made beers? That's unfair if they do. Looking at the maths:
    30 cans @ 330mL per can and 4%ABV means 30x0.33x0.04=0.396L of alcohol
    Tax on bottled/canned beer over 3.5% is $50.40 per litre. So that's 0.396x50.40=$19.96 on a block of Tun.
    GST on a $30 sale is $2.73, so tax on the block of Tun Bitter is $19.96+$2.73 = $22.69.
    That leaves $7.31 out of the sale to pay for the beer/brewing, canning, distribution (from Belgium), marketing, bottle shop profits, brewery profits etc. I just don't see how that's possible - am I missing something? How are our local breweries supposed to compete with that? I haven't tried Tun Bitter, maybe it's sh$$house, but that's kind of irrelevent.
     
    HaveFun likes this.
  2. MHB

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    Posted 19/5/19
    Nearly, but you get a discount on the alcohol content, comes to about 1.15%, its to compensate for the GST, otherwise it would be a tax on a tax.
    So the alcohol calculation would be on 4%-1.15%=2.85%. The excise comes to 30*0.33*0.0285*$50.40=$14.22(ish), given the rate is right, haven't looked it up recently.
    Still not a lot of fat on the bone, its pretty hard for anyone other than a very big brewery to make much of a living selling packaged beer, you need to be selling millions of units to make a buck.
    Probably why most small breweries are selling direct, you can make a lot more if you keep all the margin.
    Mark
     

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