We are being ripped off

[mondestrunken]

A recent trip to Northern Europe highlighted how expensive beer is in this country.

A couple of examples:

A small, independent Belgian brewery: 6-pack of mixed (i.e. triple/dubbel/brune) bottles of 6-7% beer for 11 euros ~ $16.
6-pack of leffe blonde in australia = $30 (sure there's transportation and all, but isn't Leffe a mass produced beer?).
6-pack of interesting 4-5% beer from a small, independent Australian brewery: $25

3 pints of industrial English ale (e.g. London Pride, Bishops Finger, etc. things you'd see in the specialty international aisle of chain bottle-shops) in UK supermarket: 5 GBP ~ $8.50.
1 pint of similar in Australia would be $8-9
1 pint of something interesting, e.g. Little Creatures is probably $6 or so.

Or, alternatively in Australia, I can buy a 12-15% 750mL bottle of death-bag wine in a bottle for about $4 from the supermarket.

Why is it so?

 

[labels]

Tax regime.
There are six levels of excise on beer, three for containers 48L or more (kegs) and three for under this amount (packaged beer)
Each level is based on alcohol content but basically low alchol - low tax, mid strength - mid tax, normal strength - high tax.
Excise is raised twice per year based on the previous six months CPI
There is NO excise on wine, there is WET tax, wine equalisiation tax which is higher for mega wineries and very low for small wineries
Small craft brewers do get some tax relief but it's minimal compared to the wine industry
Also the retailers here are greedy bastards

 

[labels]

Plus GST which is added on top of and including excise - double dipping tax.

 

[Danscraftbeer]

The most expensive I have bought is state local. $10 for one 375ml La Sirene for example.
Even closer local $25 for a six pack of 3.5% Berline Weiss brewed 15m drive from my house.
I cant say they were a rip off. Just to compare with brewing your own up to or more enjoyable.
Local is fresh. Imported can get old by the time your drinking it but home brew is by far the best of all.

 

[Lyrebird_Cycles]

Treasury has been trying to fix this since the Henry review.

Their answer is create a level playing field by making all alcoholic beverages pay the same level of excise. If this happens it would most likely be the current level for spirits, which is about $1 per standard drink.

If this gets up that $4 bottle will cease to exist as the tax will jump from well under $1 to about $8.00. The big end of the wine industry hates this idea of course.

 

[MHB]

Nice to have a good whinge, but, some northern European countries charge what we would regard as ridiculous rates of income tax, fuel tax and even control how many bottles of spirits you can buy in winter...
Last time I got sick I spent a couple of weeks in hospital, what would have cost a house in the US, here $1.50 in car parking.

We do have higher excise on beer and smokes than some countries, lower than others.
We could have cheaper beer and dearer hospitals, on balance I think we do pretty well.
Mark

 

[labels]

Nice to have a good whinge, but, some northern European countries charge what we would regard as ridiculous rates of income tax, fuel tax and even control how many bottles of spirits you can buy in winter...
Last time I got sick I spent a couple of weeks in hospital, what would have cost a house in the US, here $1.50 in car parking.

We do have higher excise on beer and smokes than some countries, lower than others.
We could have cheaper beer and dearer hospitals, on balance I think we do pretty well.
Mark

Not disagreeing with you Mark, but the conversation has swung towards why beer has a heavy excise and wine has none. A level playing field for tax on alcohol ahs been in the media for the last few years, nothing has changed but even a moderate level of excise on wine would help with the hospitals.
On the other hand, hospitals are state institutions and alcohol tax is federal

 

[Lyrebird_Cycles]

Nothing has changed because the decision would send a large number of the grapegrowers in the Riverina and the Riverland broke. They are already being paid unsustainable prices for grapes, this would wipe out something like half of their market and prices would get even worse.

 

[2cranky]

On the other hand, hospitals are state institutions and alcohol tax is federal

So the more alcohol we consume the more we pay the feds.

I guess we deserve that for being piss heads.

 

[Lyrebird_Cycles]

As I understand it, since GST replaced state based license fees and sales tax on alcohol sales, it's part of the legislation that the money raised by the GST component must be returned to the states.

 

[SeeFar]

I came back to brewing because of the price of quality beer.

Sure, brewing is an enjoyable process, the anticipation is exhilarating and you can learn a lot of interesting science along the way. However there are so many amazing beers out there that I don't really need to brew myself to get what I want but I already have a bunch of expensive (financial and temporal) hobbies. So I need to take the high financial cost out of my beer drinking hobby now I have house loans, kids, a mountain bike addiction, travel addiction, etc. etc. I guess I'm swapping financial outlay for my time.

Lucky I enjoy brewing and can make decent booze.

 

[Danscraftbeer]

I came back to brewing because of the price of quality beer.

Sure, brewing is an enjoyable process, the anticipation is exhilarating and you can learn a lot of interesting science along the way. However there are so many amazing beers out there that I don't really need to brew myself to get what I want but I already have a bunch of expensive (financial and temporal) hobbies. So I need to take the high financial cost out of my beer drinking hobby now I have house loans, kids, a mountain bike addiction, travel addiction, etc. etc. I guess I'm swapping financial outlay for my time.

Lucky I enjoy brewing and can make decent booze.

and become a judge yourself and pay the painful price here and there for top shelfer craft beers to get reference on variation.
That's the idea I subscribe to.

 

[Dae Tripper]

WET tax is WET tax, not variable, it is 29% of the wholesale. Then GST on consumer sales. Then GST, plenty of tax thanks.

And all the while the real criminality is charing excise on fuel ethanol, renewable yet taxed to oblivion.

While we are at it the constant indexed excise is an unsustainable way to tax out all viable business let alone bleed customers dry. I comes under the guise that if you drink you beat your wife thing, so we raise tax. That does nothing to address the problem other than leave them to beat them up because they have less money. This is the super simplified political version, a reason for more tax.

All in all the part of the way it is all taxed is because Australia went to very few breweries for a significant period of time and the laws reflect that. No pollie is willing to change it, even if they say they do.

 

[mondestrunken]

Yes it's a whinge and a rant, and there's nothing more boring than cost-of-living whinges, I know.
My point is there is no logical reason I can think of why beer of any description needs to be 4-5x expensive as cheap-ass wine that no one realistically drinks for pleasure.
I could go on with my rant but I won't bother - if you want you can just imagine it yourselves. And yes I feel very much like Grandpa Simpson at the moment.

Anyway it's all the more reason to go ahead with my planned homebrewery capacity expansion...

 

[malt junkie]

Nothing has changed because the decision would send a large number of the grapegrowers in the Riverina and the Riverland broke. They are already being paid unsustainable prices for grapes, this would wipe out something like half of their market and prices would get even worse.

Fully get this, and people have their livelihood, many years and a good chunk of change in those vineyards. Note we have a bunch of new Craft Breweries Kick off every month, they too have put in time, staked their livelihood, and usually all their assets on their business. More than 75% fail in the first 2 years, due to cash flow, why? Because they have to pay tax on a product they're yet to sell. If the wine industry had to do that it would have been on it's knees decades ago. So why the inequity?

 

[Lyrebird_Cycles]

Your argument is not with me.

BTW I diasgree that most craft breweries fail because of tax. They fail because they think that making beer well = running a brewery.

 

[technobabble66]

...
Also the retailers here are greedy bastards

Possibly.
Or they need to cover ridiculously high leases that reflect ridiculously high (commercial) property prices, as a result of appalling poor economic management by both sides of politics over the last 15 years. Plus a voting public who seem blissfully unaware of the true impact of their property wonderfully skyrocketing in value.

You could also argue wages are a major cost factor as well, though you could then debate it's a reflection as well of those increases in cost of living (namely property/mortgage).


Otherwise, yeah I'd agree the disparity between wine & beer seems illogical at face value.
Should be a simple tax rate as per alc%.
If you could argue the tax relief is needed to support smaller vineyards & wine producers (which has some sound reasoning to encourage diversity), then simply introduce a similar relief for beer & spirits producers - one that benefits small (& new) producers to encourage diversity in beer/gin/whiskey/etc producers as well as wine.

Edit: and as WEAL covered, I'd definitely agree it's good to pay high taxes to provide decent health and education etc

 

[warra48]

Lots fail because they are not good at running a business.
No different to many of the other small businesses which fail.
Many small business owners do not have a proper business plan, no vision as to what they want to achieve, no proper monitoring and analysis of their costs and financial performance, no marketing plan, no projections, no cost control, etc etc, and are also often under capitalised. The result is that they revert back to a "comfort zone" doing the activity of the business without managing it. I've seen it with two of my wife's close relatives, one of which went bust in 2 different small businesses.

 

[malt junkie]

Your argument is not with me.

BTW I diasgree that most craft breweries fail because of tax. They fail because they think that making beer well = running a brewery.

The standard 50% new business failure, I believe well covers your statement, the further 25% over and above most other industry is a bloody big jump, and note it is still the case that excise is aimed at keeping the big end of town happy.
The wine industry doesn't want to see the changes outlined above, because vineyards will go belly up and then be taken over by one of a few conglomerates, and we'll have less variety less quality, with a few big players calling the shots.

CUB, Nathan Lion ... errr

 

[wide eyed and legless]

Lots fail because they are not good at running a business.
No different to many of the other small businesses which fail.
Many small business owners do not have a proper business plan, no vision as to what they want to achieve, no proper monitoring and analysis of their costs and financial performance, no marketing plan, no projections, no cost control, etc etc, and are also often under capitalised. The result is that they revert back to a "comfort zone" doing the activity of the business without managing it. I've seen it with two of my wife's close relatives, one of which went bust in 2 different small businesses.

All the above I agree with, even more so when a hobby is transformed to a business, where the business is governed by the heart not the head.

Edit: and as WEAL covered, I'd definitely agree it's good to pay high taxes to provide decent health and education etc
Wasn't me in this thread Technobabble it was MHB but I fully agree with him alcohol is the most dangerous drug to society should attract a lot of tax to help cover costs. Though it does not explain the difference in wine and beer, wine drinkers as well as beer drinkers cause road accidents, and I suspect more bus shelters are vandalised by beer drinkers than wine drinkers, maybe its to pay for the bus shelter refurbish.
Plenty of vineyards get bulldozed, admittedly it is a big loss of time, effort and money put in by the grower but the land is still there. The biggest part I hate and it is not so much the tax is paying $15 and $16 a pint in some pubs on the way to the football, now that has got to be rip off mode.