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Report

Independent brewing industry national economic evaluation

04 Jul 2017
Description

The Independent Brewers Association (IBA) has engaged Essential Economics Pty Ltd to prepare a national economic evaluation of the sector.

The IBA is a national body, which represents the Australian independent brewing industry. An Independent Brewer produces less than 40 million litres per annum, and has no more than 20% ownership by any other brewer that produces more than 40 million litres.

The independent brewing industry is a strong growth sector expanding over the past decade from just 30 businesses in 2006 to approximately 380 businesses in 2016.

This tenfold increase in business growth, which has been achieved with little government support, has led to a situation where independent brewing businesses account for approximately 95% of the total number of Australian brewers, highlighting the importance to the economy of this small business driven sector.

In order to continue to grow the independent brewing sector in line with similar examples overseas, improved government support is required in terms of current tax settings with regard to lowering excise levels and providing subsidies similar to those assisting small wine producers under the Wine Equalisation Tax (WET) rebate.

Importantly, the 2016 Federal Budget announced a proposed amendment to the WET rebate, based on a reduction in the rebate (over two years) from the current level of $500,000 per entity to $350,000 per entity. This change to WET rebate will save the Federal Government a significant amount of revenue over four years, and the IBA are advocating for a proportion of these savings to be diverted to supporting independent brewers. This availability of funds would improve the ability of independent brewers to invest in their businesses and generate additional growth outcomes in their local economies (which are principally regional areas).

The objectives of this report are:

• To prepare a robust economic evaluation of Australia’s independent brewing industry which clearly shows the economic importance and value of the independent brewing sector to national, regional and local economies

• To identify existing constraints to industry growth

• To highlight potential business and industry benefits arising from government support

Publication Details
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Prepared for Independent Brewers Association by Essential Economics
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