The hike, which is one of the largest six-monthly increases outside of the Covid pandemic, will see the tax on RTDs and spirits such as whisky, gin and rum rise to $110.15 a litre.
For a standard 700ml bottle of spirits, approximately $30 goes directly to the Government in alcohol excise.
The Spirits Council of Australia said the tax rate is six times higher than the United States and around double of New Zealand.
It argued that Australia already has the highest spirits tax in the world outside of Scandinavia, with the federal government expected to raise $9.1bn in total alcohol taxes this year alone.
Spirits Council of Australia executive director Steven Fanner said: “We have a system where twice-yearly tax hikes on alcohol have been on auto-pilot since the early 1980s.
“This is not a system that should be a set-and-forget — without reform the government risks amyriad of unintended consequences, including driving demand for cheap, black-market alternatives.”
The Australian Distillers Association (ADA) has also renewed calls for urgent reform.
The trade association has argued that the tax is placing “unprecedented pressure” on Australia’s legitimate distilling industry while creating the conditions for the growth of the illicit alcohol market.
ADA CEO Kylie Lethbridge said the issue had moved well beyond the financial impact on distillers.
“This is no longer just a tax issue, it is a consumer confidence issue,” he said.
“Every excise increase makes legitimate Australian spirits more expensive while illegal operators continue to avoid tax altogether. Criminals don’t pay excise, don’t comply with food safety standards and don’t care what ends up in the bottle.”
The ADA is calling on the Federal Government to review Australia’s 40+ year old taxation framework and increase investment in compliance and enforcement to combat illicit alcohol production and distribution. It also wants the Government to work collaboratively with industry to protect consumers.
