Spirits Prices Jump Again Today as Australia’s Alcohol Tax Hits $108 a Litre

The increase is part of Australia’s long-standing excise system, which automatically adjusts alcohol tax every February and August using the Consumer Price Index (CPI). Because the change happens automatically, it does not require Parliament to vote on every adjustment, although governments can introduce separate legislation to pause or change the system for specific products.

While the headline figure refers to tax per litre of pure alcohol rather than the amount inside a bottle, the higher rate eventually flows through the supply chain. Importers, distillers, distributors, bottle shops and hospitality venues often pass at least part of the additional cost on to consumers as stock purchased under the new rate reaches shelves.

Why spirits are affected differently from beer

One reason the latest increase has attracted attention is the different tax treatment across alcohol categories. The Albanese Government previously announced a two-year freeze on excise for draught beer served in pubs, clubs and other hospitality venues to support the industry. That measure does not extend to bottled spirits or most ready-to-drink spirit products.

Spirits & Cocktails Australia, the industry’s national representative body, says the current system leaves spirits carrying a heavier tax burden than other alcoholic beverages. Executive Director Steven Fanner has argued that repeated CPI-linked increases widen the pricing gap even though drinking habits have changed significantly over recent decades.

What it could mean for consumers and hospitality businesses

The immediate increase per bottle may appear relatively small, but repeated indexation means costs build over time. Premium spirits, imported brands and cocktails can become noticeably more expensive as wholesalers and venues update pricing to reflect higher operating expenses.

Hospitality operators continue to face rising wages, insurance, rent and utility costs alongside alcohol taxes. Industry organisations representing bars and late-night venues say regular excise increases make long-term pricing more difficult, particularly for independent businesses operating on narrow margins.

Consumers comparing prices may also notice that promotions vary more widely between retailers because some stores continue selling stock purchased before the latest excise adjustment, while others begin pricing newer inventory almost immediately.

How Australia’s excise system works

Alcohol excise is calculated according to product type and alcohol content rather than a single flat rate across every drink. The Australian Taxation Office publishes updated excise rates twice each year after CPI indexation, making the adjustments predictable even though the exact figures change with inflation.

Anyone wanting to understand the official calculation can find detailed guidance on the Australian Taxation Office’s alcohol excise information.

Broader household cost pressures remain a major issue across Australia, with food, housing and everyday expenses continuing to shape spending decisions. Recent trends in the property market can be explored in this update on Australian house prices.

For now, the latest CPI adjustment means spirits remain subject to Australia’s regular indexation system while the separate freeze on draught beer continues. Whether similar relief is eventually extended to spirits will depend on future government policy and parliamentary debate, but the new excise rate is now in effect across the country.