Communities in Australia have prevented the federal government to include a 50% tax cut on draught beer in the new budget.
As Movendi International reported previously, alcohol industry lobby groups fronted by The Australian Hotels Association (AHA), Clubs Australia (CA), and the Brewers Association (BA), pushed aggressively for a 50% reduction in draught beer taxes.Â
If the beer tax cut had gone through, it would have had wide-ranging negative effects on the health of the Australian people, communities, economy and society at large.
Community advocacy against the proposed alcohol tax cuts
The Federal Budget did not include the tax cuts in a win for communities across Australia who advocated against the tax cuts and made their voice heard. As a result, the health of families and communities in Australia has been prioritized over private profits.
Preceding the budget decision, the proposed beer tax cut received a lot of media attention. Community groups came forward to call out this ill-advised proposal. When news of the proposed beer tax cut was reported, women’s, community, and public health advocates were quick to raise their disappointment, bewilderment, and concern at the impact of this proposal.
As these advocates pointed out, there are far better proposals and recommendations to consider for the budget than a beer tax cut which would increase harm even more and thus negatively impact people and communities.
Decreasing beer taxes would further increase alcohol harm at a time when we are already seeing increases in these harms,” wrote Caterina Giorgi, the CEO of FARE, in Women’s Agenda.
This proposal would also result in millions of dollars being gifted to beer companies, rather than being spent on women’s health and community services when support is so desperately needed.”
Caterina Giorgi, CEO, FARE
As Movendi International previously reported, more than 80 community leaders and organizations in Australia signed an open letter to Treasurer, the Hon Josh Frydenberg MP, to halt any plans for an alcohol tax cut. They pointed out that the harm caused by the products and practices of alcohol companies is already high in Australia with the pandemic making it even worse.
Several key statistics indicate rising alcohol harm in Australia:
- There was an 8.3% increase in Australian deaths caused by alcohol in 2020 compared to 2019.
- For the first time in four years, the number of Australians who use alcohol has increased in 2020.Â
- Alcohol-related ambulance callouts have also increased by 8% in 2021 compared to 2020, as per St Johns WA.Â
- This translates to 16 ambulance call-outs for alcohol intoxication per day.
The alcohol industry cited the COVID-19 pandemic losses saying they can’t stay profitable with the current taxes.
However, contrary to industry claims, in 2020, amidst the ongoing pandemic, the alcohol industry made $15.6 billion in retail sales, which is a 26.7% increase from 2019.Â
In response to Big Alcohol’s attempt to claim the push for tax cuts was to support small businesses, advocates questioned why the government does not support them directly instead of cutting taxes which will benefit alcohol multinationals who have no problem making profits during the pandemic.
FARE has consistently advocated for common-sense measures to keep up with the changing ways in which alcohol is marketed and sold, such as through online channels including social media, online alcohol retail and home delivery.
Beer tax cuts would only benefit Big Alcohol companies
Community groups and other advocates exposed the lobby groups behind the beer tax cuts and how giant multinational alcohol corporations would benefit and not small businesses.
The alcohol industry front group Brewers Association (BA) has been lobbying for tax cuts already before the pandemic. This time around they joined forces with the Australian Hotels Association (AHA) and Clubs Australia to push for these latest tax cuts. Behind these groups are some of the world’s biggest alcohol and sugary beverage companies pushing for beer tax cuts in Australia.
- Kirin, a Japanese beer giant owning Lion Brewery,
- Asahi Breweries, a Japanese alcohol conglomerate, owning Carlton & United Breweries,
- Both Lion and C&B Breweries are members of the BA.
- Diageo, a British liquor giant, and
- Coca-Cola Amatill,
- Both are members of AHA, where also Asahi is a member.
The estimated cost of the proposed beer tax cut was $150 million per year. Over three years, this could amount to almost half a billion dollars lost.
The benefit of the government losing millions of dollars to the detriment of people in Australia would largely be enjoyed by two multinational beer companies – Lion and Asahi. These two companies control almost three-quarters of the beer market in Australia. Lion is a member of the BA, and Asahi is a member of both the BA and AHA – facts that underline the interests of the lobby front groups in the beer tax cut.
These Big Alcohol companies have been making increasingly large donations to political parties in a bid to gain influence. Reportedly, Lion and the AHA between them donated $389,773 to the Coalition and $290,608 to Labor in 2020-21. This does not include other gifts, hospitality, and travel provided to politicians by beer companies.
Economists called proposed beer tax cuts a gimmick
The Conversation conducted its pre-budget survey with a panel of 46 leading Economists in Australia. Almost half (47.8%) of the surveyed economists wanted a smaller budget deficit. A significant proportion (41%) wanted either the same or a bigger budget deficit to boost spending in other areas, including an accelerated transition to net-zero carbon emissions and Australia’s defense.
The beer tax cut was deemed the worst measure if the government did pursue measures adding to a deficit. The highest proportion (45.7%) of the surveyed economists said this would be a bad idea.
Economist Saul Eslake said gimmicks such as the beer tax cut were unnecessary.
Sources
FARE: “FARE Federal Budget 2022-23 Statement“
Women’s Agenda: “This could be a budget for women – if the government makes the choice“
The Conversation: “Cut emissions, not petrol tax; fund childcare, not beer. What economists want from next week’s budget“
