Soaring alcohol taxes have been blamed as brewing giant Lion announced the closure of the historic James Boag brewery in Launceston after 145 years of beer production. The decision will result in 42 job losses and marks a significant cultural loss for Tasmania.
Government taxation blamed for brewery closure
Lion cited declining beer consumption as a key reason for the closure, but critics argue that federal government policies have made it increasingly difficult for alcohol producers to operate in Australia. The alcohol tax, which increases twice a year in line with inflation, has nearly doubled in the past 20 years and risen by more than 20 percent since 2020 alone. Australia now has the third highest beer tax in the world, behind only Norway and Finland.
Independent Brewers Association chief executive Sabrina Kunz told the ABC that the cost of doing business is driving breweries to close. "Our breweries are simply closing down, we've lost something like 80 breweries over the last two years nationally," she said. She pointed to the alcohol tax as a key factor that needs to change.
Impact on local jobs and culture
The closure of the Launceston brewery will result in 42 job losses. All Boag's beers will now be brewed on the mainland and exported to Tasmania, ending the tradition of brewing with Tasmanian water for local drinkers. The cultural loss is significant, as Boag's has been a staple in northern Tasmania, while Cascade is preferred in the south.
Caleb Bond, a commentator, expressed dismay at the loss. "I have visited the Boag's brewery in Launceston and it was excellent, including a tasting of beers you can't get on the mainland," he said. "People in the north of the state drink Boag's and people in the south drink Cascade – and never the twain shall meet."
Broader implications for the alcohol industry
The closure follows a similar move by Lion in 2021 when it ended 162 years of South Australian Brewing with the West End brand. Bond warned that this trend will continue unless the government changes its approach to alcohol taxation. "The government is, basically, achieving what it wants to. It has decided that drinking is a bad thing so it will tax it to drive down drinking and make a nice mint in the process," he said. "But, in that process, it is killing Australian jobs."
Recent research has found that nearly a third of bottle shops in Victoria, New South Wales, and Queensland are selling illicit alcohol, suggesting that high taxes are driving consumers to the black market. Bond predicts history will repeat itself, with more breweries closing and jobs lost.
The federal government makes more money each year from beer tax than from the tax on gas extraction. About $20 of a slab of beer goes directly to the government. With declining consumption and rising costs, the future of Australia's brewing industry remains uncertain.
