Below: A letter mould for your federal minister

ADDRESSEE

I am writing in my capacity as a small brewery owner and member of VAMI/WABA/NSW Brewers guild . We are seeking EXCISE TAX rebate equivalent to that granted to wine producers, which effectively gives small wineries excise tax free production for the first $1 million of sales per annum.

Attached is a summary discussion outlining the system and proposal. However I wish to also state our case for equivalence with small wineries on excise tax.

Small breweries, or microbreweries, are fewer in number and have harder financial constraints than small wineries - and for all the reasons that wineries were granted the excise tax rebate it also makes sense to offer the same rebate to microbreweries. This rebate would encourage the sector to grow, encourage start-ups, prevent closures, create regional jobs and export programs.

Some items to consider:

1. Australia has the lowest per capita number of microbreweries in the OECD. This can be related purely to rate of excise tax paid for these styles of small businesses, that is it is prohibitive for real growth

2. Most, if not all, other westernised countries have zero excise tax or significant discounts for small breweries. Australia does not.

3. Due to difficult business environment and small margins, we have few microbreweries and it has been historically difficult to provide a single voice for all of Australian microbreweries. However we are supported in this WET tax rebate equivalent by other groups of small breweries in other states of Australia.

4. A successful microbrewery sector will create regional jobs and growth in regional economy

5. A successful microbrewery sector will create and promote tourism, both domestic and international

6. A successful microbrewery sector will create export opportunities, and in time we hope to rival Australia’s wine export growth.

We also need to consider the definition of a microbrewery and discuss the Government’s (ATO) classification of a microbrewery. The Royal Australian Agricultural Society and the University of Ballarat have created a segment in their Australian International Beer Awards for "Small Breweries", which to be eligible your batch size or "brewlength" must be less than 3,500 litres. Our association (VAMI) has classed Microbreweries, to be full voting members, to also have batch size of less than 3,500 litres and not be owned by a public company. Typically in the USA, microbreweries start at about 1200 litres batch size and grow from there.

Current federal legislation says that if a microbrewery produces less than 30,000 litres of beer per annum, 60% of excise duty paid will be refunded up to a maximum of $10,000. For a brewery with average batch size of 2000 litres, this is reached in 15 brew days. What does the brewery do for the remaining 340 days of the year? In reality a brewery that is producing only 30,000 litres per year or less is a hobby and not a serious business. This ruling does not promote growth and does not create the environment for a sustainable microbrewery industry.

We call upon the Government to give small breweries equivalent excise tax rebate as per the wine sector. We are available to make any presentations or meetings with appropriate people in order to progress this proposal.

Yours sincerely