And the impact on some independent brewers as well as small hospitality businesses could be crushing.

The Federal Government’s alcohol excise is linked to the inflation rate and applied to beer and spirits twice a year in February and August.

Kylie Lethbridge, chief executive of the Independent Brewers Association, said the tax whack is one of the industry’s “greatest challenges” amid already difficult operating conditions.

“The situation is absolutely dire right now for Australia’s small and independent brewers, of which there are 600-plus businesses across the country,” Ms Lethbridge said.

Aussies are already restless about the increasing price of beer. Last week, a Sydney pubgoer sparked national outrage after being slugged $22 for a single pint of beer.

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Andre Sammartino is an associate professor of international business and strategic management at the University of Melbourne and has researched the expansion of the independent craft beer market in Australia and internationally.

Local operators are doing it “very tough” thanks to a perfect storm of “ongoing cost increases for their raw materials, utilities and the like, plus consumers who are also feeling the pinch and cutting back on the finer things”.

“The cost imposts for the six monthly excise hikes could be the final straw for some, especially as the indexation method during an inflationary period is really fanning the flames,” Dr Sammartino said.

Phil Anderson is the owner of inner-Sydney watering hole Sneaky Possum and until recently ran the Taralga Hotel in regional New South Wales, and is all too familiar with the excise.

Mr Anderson gave a rundown of what he actually sees from each schooner of beer sold, highlighting the wafer-thin margins on offer.

“If I sell a schooner for $10, I’m working on that product costing me $3. Theoretically, from every beer, I’m making $7, which sounds pretty good,” he said.

“But from that, another 35 to 40 per cent goes on staff costs, so we’re down to about 30 per cent. Then you’ve got rent, which is generally 15 per cent, plus other fixed costs that are 10 to sometimes 15 per cent.

“What are you left with? A bit more than zero.”

Big two crushing small competition

Many consumers confronted with a price rise imminently might see it as a cash grab, but Mr Anderson said the reality is that operators won’t see a red cent.

“The margin in most venues is about 70 per cent, so if you’re applying that to a keg of VB, you’re really needing to charge $13 for a schooner,” he said.

“Punters don’t understand why it’s so high because they don’t appreciate how the excise works.

“And they don’t get that the two big guys in beer are using cartel behaviour to squeeze out any independent operators. So, if you’re Merivale, you’re currently paying about $60 for a keg of Reschs. At my pub in Taralga, I was paying $420 a keg.”

The vast majority of major beer brands in Australia are controlled by either Carlton & United Brewery or Lion, owned by Japanese-based conglomerates.

“If you own a country pub, there is no ifs or buts, you have to have Great Northern, VB and Carlton Dry on tap,” Mr Anderson said.

“And CUB and Lion knows that, so they charge you way more money and then charge you all these delivery frees on top of it and you have to wait for a week for it to turn up.

“Whereas, if you are Justin Hemmes and Merivale, CUB knows you don’t have to have it, so they’re essentially paying you to. They pay a 10th of the price and charge way more than everyone else.”

From next month, about $30 will be added to the price of a standard keg. Few small businesses will be able to absorb that hit, he said.

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Industry facing dire situation

The long and painful years of the pandemic battered small brewers as restrictions forced venues to close their doors or reduce their trade, Ms Lethbridge said.

“Everything was meant to go back to normal after Covid, but we faced in some instances a 40 per cent increase in the cost of ingredients and freight and a 50 per cent increase in C02 prices.

“In parallel to that, consumer spending became much for challenged because of the cost of living, and there’s been no ease up on that.”

The impact has been devastating.

“In the past 18 months, we’ve seen 46 voluntary administrations, closures or liquidations. The reduction in employment across the industry as a result would be significant – hundreds of job losses, absolutely.”