Federal tax hike on beer means costs passed on to punters

From Wednesday, the tax on beer jumped by 3.7 per cent - and publicans say that they can't absorb the extra cost.

"It means we have to pass it on to customers," Glen Collins who is one of the owners of The Dock in Kingston said.

They warn, too, that pubs in Canberra rarely have pokie machines to subsidise their food and drink, in contrast to the clubs against which they compete for trade.

Breweries have raised their prices in recent months, according to Mr Collins of The Dock.

"We're not blaming the breweries," he said. "We're blaming the federal government."

"Schooners have gone up a dollar over the last two quarters due to an increase in keg prices - from $8 to $9 for Capital Brewing Coast Ale. That's pretty standard for all of our tap beers," he said.

"It's not good for beer drinkers. A price increase on top of all the other cost pressures means it's going to be more expensive for people to just have the pleasure of a pint of beer on a hot day," Peter Barclay managing director of the King O'Malley's pub said.

The tax on beer is adjusted twice a year based on the movement of the consumer price index. In December, the CPI jumped 7.8 per cent over the previous year, a big rise which translated into the current jump in beer tax.

One of the effects publicans fear is that people will be pushed back into their homes to drink. The industry is coming out of COVID and people are learning to be sociable again. Publicans fear that this welcome change may be slowed by tax rises on, in effect, drinking out.

The Brewers Association of Australia said beer price increases were taking a toll.

"If we keep going with these tax increases, we are looking at the $15 pint," the trade association's chief executive John Preston told the ABC.

The Brewers Association wants a two-year tax freeze on beer sold in bottle shops and the excise on tap beer halved in the May budget.

"Australia has the fourth highest beer tax in the world and that's really hurting our hospitality sector," Mr Preston said.

The effect of the tax rise is already being felt across the country.

The New England Brewing company said it would be putting up prices for some items such as its pale ale after 12 months where prices were frozen.

It can be difficult for small breweries to pass costs on, especially if products are already expensive, co-owner and brewer Ben Rylands said.

"Say you're selling cartons for $69.99, breaking into the $70 mark is a bit scary for instance," he said.

"Coming out of COVID, I feel for people that are balking at going and having a few beers."

"We're seeing from our own brewery door people are still drinking at home or socialising at home more than going out.

"And price is part of that."

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