Hunter Breweries Face Uncertain Future Amid Excise Pressure, Says Gillespie

Federal Member for Lyne, Dr David Gillespie, has raised  concerns in Parliament over the growing financial pressures faced by small breweries and distilleries in the Hunter Region and across Australia. In a speech to Parliament, Dr Gillespie urged the government to consider freezing the excise on these local businesses, warning that without intervention, the thriving industry could face a bleak future.

Dr Gillespie highlighted the crucial role of the excise rebate scheme, which allows small-scale brewers to remain competitive against larger international firms. “There is a very important rebate for these small brewers so they can compete with the big international brewers who are dominating the Australian market now,” Dr Gillespie said. “If they’re a small-scale brewer, they pay the excise like everyone does, but the first $350,000 is rebated.”

However, Dr Gillespie highlighted that this rebate is not indexed to inflation, leading to increased financial strain on these businesses. He noted that frequent excise increases, coupled with rising production costs, are pushing many small breweries and distilleries to the brink.

Adding to the discussion, Shawn Sherlock from Foghorn Brewery in Newcastle—a highly regarded figure in the small brewery sector—emphasised the critical impact of excise on small breweries. “Any brewery within the small brewing sector will be adversely affected by the excise” he explained. Sherlock pointed out that while the $350,000 rebate might sound substantial, it is quickly exhausted. “It’s easy to run that up, then you have to pay the excise every week,” he said. “It’s different to business tax because with excise you have to pay weekly, and before you are even getting a return. It’s very difficult for small brewers because of the current issues around hospitality, declining beer sales, and people tightening their spending.”

Sherlock also highlighted the disparity between the treatment of small brewers and winemakers, who receive a break through the Wine Equalisation Tax (WET) rebate. This, combined with declining beer sales and tighter consumer spending, creates a significant burden on small brewers. “The bigger Australian brewers aren’t Australian-owned, so it’s important to support local brewers—it supports local employment, particularly in regional areas. They are also tourist drivers. If you lose that employment, then it flows on to tourism and even more employment is lost, which is not good for regional Australia,” Sherlock stated.

Sherlock stressed that indexing the rebate to CPI is only a start and that further reform is urgently needed. “An increase to the rebate will make it equitable for the small sector to fairly compete with the larger foreign-owned brewers like Lyon Nathan and CUB.”

Dr Gillespie, in his speech, echoed similar sentiments, giving a “big shout-out” to several local businesses in his electorate and noting their vulnerability to financial pressures. “With several around Maitland and the Hunter, we also have Coastal Brewing in Forster-Tuncurry, Moorebeer Brewing and Black Duck Brewery in Port Macquarie, the Tinshed Brewery in Dungog, and the Farmer’s Wife Distillery in Allworth. These are all locally grown and flourishing distillers and brewers who supply the local market. But they are under pressure like everyone in this industry because of the effects of inflation.”

Sherlock also addressed public perceptions, referencing commentary in the Sydney Morning Herald and The Age. “People saying, ‘Oh well, it’s business, they should know what they got themselves into,’ might be true, but it’s not usual or fair for a specific sector to be taxed separately. That’s the big difference here, and why small brewers are being affected,” he said.

Dr Gillespie and Sherlock both stressed that this issue should matter to people in Newcastle and the Hunter Region. “We are talking about local tourism, employment, and keeping jobs in Australia. Thousands of jobs around the nation, particularly in regional areas, depend on this,” Sherlock added.

Dr Gillespie’s federal seat of Lyne covers an extensive area from Ballengarra in the north to Paterson and Karuah in the south, extending inland to the western boundaries of the Shires of Greater Taree, Port Macquarie-Hastings, Gloucester, Dungog, and Maitland (part). The main towns within Lyne include Bonny Hills, Bulahdelah, Dungog, Forster, Gloucester, Gresford, Harrington, Hawks Nest, Lake Cathie, Lansdowne, Laurieton, Nabiac, North Haven, Old Bar, Paterson, Smiths Lake, Stroud, Taree, and Wauchope. This diverse region is home to many of the small breweries and distilleries Dr Gillespie and Sherlock are advocating for.

Dr Gillespie serves as the Deputy Chair of the Standing Committee on Climate Change, Energy, Environment and Water, representing The Nationals in the House of Representatives.

Foghorn Brewhouse, located in Newcastle, NSW, is a prominent craft brewery known for its commitment to brewing high-quality, locally-produced beers. Established in 2015 by renowned brewer Shawn Sherlock, Foghorn Brewhouse has quickly become a staple in the Newcastle beer scene, offering a wide range of handcrafted beers brewed on-site in a historic warehouse. The brewhouse also features a vibrant, industrial-style pub that serves up their signature beers alongside a menu of hearty pub fare, making it a popular destination for both locals and visitors.