David Whittaker,the co-founder ofManly Spirits Co. Distillery,said a bottle of his Australian dry gin earns the federal government more than $25 in excise and about $8 in GST.
“That’s $33 per bottle in tax before we have paid for the bottle,label,cap and spirit inside,let alone the labour to locally manufacture in Sydney’s northern beaches and national distribution costs,” he said.
“Spirits are taxed more than wine or beer. Excise on spirits is raised every six months like clockwork and we often don’t pass on those costs to consumers,meaning our margins are slowly eroding.”
Shane Casey,the head distiller atBrix Distillers,which manufactures rum in Surry Hills,said the lopsided tax regime made it more difficult to convince drinkers to opt for Australian spirits rather than cheaper imported brands,beer or wine.
“A lower tax rate for smaller producers would definitely help us to get them to choose Australian over imported,or may even allow them to choose a quality Australian rum over a case of beer,” Mr Casey said.
Despite the challenges,the number of distilleries opening in Sydney in recent years is growing and,like craft breweries,most have small bars attached. As well as Manly Spirits Co. Distillery and Brix Distillers,there's Archie Rose in Rosebery,which makes gin,vodka and whisky;Poor Tom's,which makes gin in Marrickville;and some craft breweries such asYoung Henry's in Newtown are branching out into distilling as well.
Mr Whittaker said the “spirits super tax” was a problem for Australia’s fledgling distillery industry.