Next week marks another excise increase for spirits in Australia, lifting the tax to $105.98 per litre of pure alcohol as of August 5th. This is business as usual, with spirits excise rising twice a year like clockwork.
As a founder of Barlei, a naturally sugar-free liqueur and aperitivo brand dedicated to better-for-you, innovative cocktails, I’m feeling the weight and not just for our business, but for anyone committed to innovating and producing great Australian beverages.
Every increase like these eats into the already tight margins for local independent brands and small producers, making it that much harder to launch new products, experiment with healthier options (like sugar-free and low-cal) and compete with global giants who can weather the rising costs and absorb or offset them elsewhere. The reality is higher prices trickle down to consumers and on-premise operators, further shrinking the window for real innovation, creativity and healthy competition.
While there’s currently a freeze on draught beer excise, this relief doesn’t extend to spirits or RTDs. This divide fragments the industry and makes it even tougher for craft and boutique spirit producers already contending with some of the world’s highest spirits taxes at a distinct disadvantage. Meanwhile, non-alcoholic beverages, many replicating spirits and cocktail ingredients face no excise at all. No wonder this space is booming! Without the tax burden and regulatory barriers, there’s more room for creativity, experimentation, risk-taking and viable profit margin. The economics almost encourage entrepreneurs to go non-alc rather than locally made spirits.
Excise doesn’t just influence pricing, it shapes strategic business decisions too. As innovation becomes prohibitively expensive, small producers are forced to scale back, limit their creativity or even exit the market. This loss impacts not just the businesses but consumer choice, particularly for those seeking unique, authentic Australian-made products.
Continued excise hikes without parity across beverage categories further weaken the broader night-time economy. Hospitality venues from small bars to fine dining restaurants bear significant cost burdens, often forced to raise prices or reduce offerings just to survive. If public policy truly aims to foster a vibrant, globally competitive Australian drinks scene, it must address these barriers before we lose the richness and diversity that makes out sector so special.
I fully appreciate excise’s role in raising revenue and supporting public health but if we want a drinks industry that nurtures local innovation, supports jobs and gives consumers real choice, we need a smarter approach. Without it, we risk seeing fewer Aussie-made products on shelves and more talent choosing to innovate in non-alcoholic drinks because the doors there remain open. We also risk making the full cocktail experience, a core part of what Barlei stands for, feel out of reach for many, becoming a costly luxury reserved only for those who can afford $40–$50 per drink. That’s not the future I envision for my business or for the broader industry.
I’d love to hear from others navigating this reality. How can we ensure policy evolves to support world-class drinks, local innovation and sustains memorable experiences right here in Australia?
