Budget Delivers Little For Indie Beer

The Independent Brewers Association (IBA) has welcomed some aspects of the Federal Government "recession-busting", jobs-focused budget, but many of the industry's requests do not appear to have been addressed.

IBA chair Pete Philip said in a statement today that apparent positives for indie brewers, such as food and beverage's inclusion in the Modern Manufacturing Fund, support for the hiring of trainees, and the Instant Asset Write Off Scheme, are "somewhat tempered" by the fact the IBA's pre-budget request for excise debts to be forgiven has been ignored.

He points out that "anyone carrying excise debt as a result of those expenses being deferred during the pandemic will be limited to their own financial reserves rather than borrowings", adding: "Anyone carrying a tax debt will be precluded from bank loans which is why our pre budget submission also asked for these debts to be forgiven. This is also the case for the instant asset write off option – how will our members invest in equipment if they don't have any cash or can't borrow?

"It is also disappointing to see that our continued ask for relief on excise was not considered as part of the tax cuts announced. Although we knew this was going to be a long burn, it would certainly have made a significant contribution to ensuring breweries were able to come out the other end of this disaster by investing in their business and ultimately creating new jobs."

The IBA's pre-budget submission focused on five key areas:

  1. The creation of Beer Australia supported by $300,000 in one-off funding to the IBA. This would be a body similar to Wine Australia with a focus on developing a national industry strategy designed to grow the independent brewing sector to 15 percent of the Aussie beer market, create thousands of new jobs in brewing, agriculture, logistics, manufacturing, hospitality, and services, expand investment, and build exports.
  2. Increase the Small Brewers Rebate Scheme from the current cap of $100,000 to $350,000 per year equal to that assisting the wine industry, and forgo excise debt accrued by brewers while they have been deferring payments from March 2020 and allow brewers to pay their excise net of any rebate rather than needing to pay excise and claim a refund.
  3. Support regional growth via the introduction of a Regional Brewing Support Package.
  4. Redirect another $50-100 million into Modernisation Grants to act as an economic stimulus as many of the projects support the build or installation of new infrastructure.
  5. Defer any regulatory changes that will further impact the industry for the next two years. 

 

IBA chair and Wayward Brewing owner Pete Philip.

 

"Expansion of the manufacturing grants with a focus on food and beverage is very welcome," Pete said, "and something we have been calling for since the last round closed as indie brewers received funding under this program. Continued investment in brewery infrastructure will be a surefire way to ensure economic recovery for our members so we congratulate the government on this measure."

While the budget appears to offer little concrete for small brewers or indeed the hospitality and events industries that have been savaged by the pandemic, it has committed more than $250 million to a Regional Tourism Recovery Package, which includes $100 million for infrastructure projects designed to boost regional tourism, of which craft breweries are a growing feature.

Away from the budget, the IBA has been making progress in other areas in what's been a challenging year. While their key events, Good Beer Week and BrewCon, had to be cancelled in 2020, they're going ahead with The Indies awards, now set to take place virtually next month and featuring parties in each state.

They exceeded expectations in receiving 699 entries, with GM Kylie Lethbridge saying the awards night will be hosted from a professional production studio in Melbourne with live crosses to the events interstate.

"Our sponsors felt there was still a need to celebrate and come together," she told The Crafty Pint, "Even if it's only virtually, we can celebrate the beer and what we're all about."

She says advocacy is "going really well on a state level", with an independent brewing strategy in place in Queensland ahead of their forthcoming elections, another strategy in place in New South Wales, and discussions ongoing in other states. In Victoria, she's hopeful for a change to eligibility for the State Government's Licensed Hospitality Venue Fund, which currently excludes most brewers, as we reported yesterday.

Meanwhile, the series of Virtual Mash Up events continued this week with a webinar on government grants available for the brewing industry.

"It's not all bad," Kylie said. "A lot of my job is bashing my head against a brick wall, but the team is doing some great stuff."


If you'd like to nominate anyone for the Industry Nominations in the 2020 Indies, you need to do so today (Oct 7) here before submissions close.

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