Sydney’s Inner West has long been an area that celebrates arts, music, culture and food and drink, and even as the area develops, that sense of community remains strong. For the past 13 years, I’ve run four local cocktail bars in Newtown (Earl's Juke Joint, Jacoby's Tiki Bar, The Trocadero Room and The Magpie), and I’ve lived in the area for more than 20 years. Being part of our community is a source of pride for both myself and the teams. Customers become regulars; regulars become friends. I was even lucky enough to meet my partner at one of the bars.
Authentic, independent venues are the heartbeat of this area and are what make it special
These are the types of venues that lead the way in terms of creativity, culture and culinary innovation. They are the epitome of the “third place” – spaces separate from home and work where people can connect, socialise and form community. A social gathering point where hospitality is the most important thing; where ideas take shape during conversations. In an increasingly digital world, and as urban areas become more developed and dense, having these places where we connect with others is essential.
These are also the venues that emerging performers get their first chance to play in front of audiences. Where people can see and hear something they can’t just stream on a service at home; that electricity of a shared experience, seeing the next big thing playing at an intimate venue, or even just singing along to Wonderwall as a local muso bangs out the classics on a Saturday night.
As a small business within the hospitality industry, there are many challenges, and we hustle to make it work. But costs such as the Federal Government’s spirits excise, which rises twice a year, is something we can’t control. Over the years many small venues have had to absorb these costs, while cutting staffing hours, booking less live performances and putting off any reinvestment into our businesses and communities. Other costs like insurance, rent and goods are rising, too, which means that despite our best efforts to keep prices the same, it gets to a point where we’d be making less every drink we pour.
Yes, your gin and tonic has become more expensive, but it’s not because we want to charge you more
During the last Federal Election, Prime Minister Anthony Albanese made a commitment to freeze excise on draught beer from August 2025. That’s welcome news for the venues that have taps and sell a lot of beer, but it does nothing to support the thousands of small businesses where spirits, RTDs [ready-to-drinks] or canned and bottled drinks are the primary products. The tax on wine has been the same for two decades, while the excise on spirits has risen 17 per cent since 2020.
As an industry our ask is simple:
Extend that freeze to spirits, too, while industry and government work together to find a modern solution that is fit for purpose
The alcohol tax system was introduced more than 40 years ago. That means there have been 40 years of increases getting greater and greater as time goes on. As a result we now have one of the highest excise rates in the world.
If the price of spirits keeps going up, soon we will be looking at $40 cocktails, something that is both undesirable and honestly untenable, as this prices out most of us from being able to go out and enjoy a drink with our mates. Smaller independent venues will cease to exist, and you will just be left with large cookie-cutter corporate venues, catering only to those in the highest income brackets.
Excise goes up twice a year every February and August in line with CPI. The RBA’s target inflation rate is two to three per cent. In a one litre bottle of 40 per cent proof gin, $42 of that is pure excise. Why is a bottle of Australian gin cheaper to buy in America than it is here? For example, a bottle of Four Pillars gin is USD$33, and with conversion equates to about AUD$50. That same bottle costs around $80 in a local bottle shop. Around half of this is excise tax, which hurts both the distiller and the end consumer. At this point we need to ask: why is this the case? How can Four Pillars be cheaper in America than it is in Australia? To borrow a popular political colloquialism, that doesn’t pass the pub test.
If local spirits were able to compete then I’m pretty sure every venue in Australia would be pouring locally made products
A lot of these distillers are based in regional areas, so this would help boost employment. The economic benefits would not just be limited to our industry but also across tourism, with export potential for those able to scale up.
A federal parliamentary inquiry resulted in the report Food for Thought: The opportunities and challenges for Australia’s food and beverage industry, which made a key recommendation – to conduct a full review into the alcohol industry and its taxation system.
This excise system is no longer fit for purpose and needs to be paused and rethought. We now essentially have a two-tiered tax system where draught beer gets relief but spirits do not. Large corporate venues with huge tap systems benefit while smaller ones without taps don't. Small businesses are being crippled, with many venues closing in recent years as a result. Hospitality has always been a tough game, but without reform this may be an industry that can’t recover.
Hospitality folks are a resilient bunch, but at some point we need a break
Once costs stop going up, we can then start hiring more people, booking more performers, the culture of our area can keep flourishing, small businesses can grow and keep the environment around live music developing. Ideas and conversations can keep flowing. We don’t have to lose our locals.
This is the canary in the coalmine for the government and a rally call for everyone in the industry to come together, join the Night Time Industries Association’s campaign, and push this issue to government. If we don’t, even more small bars, live music venues and small arts organisations may be forced to shut their doors for good. Here’s hoping it doesn’t get to that.
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