The beer excise gap is the difference between the beer excise expected to be collected from beer consumption in Australia (theoretical beer excise) and beer excise actually collected by us or the Australian Border Force for a defined period, typically a financial year.
Beer excise is a duty on beer manufactured in Australia and not exported.
Imported beer products are subject to customs duty, at a rate equivalent to excise, to ensure they are treated consistently with goods manufactured in Australia. These imported goods are referred to as excise equivalent goods (EEG)
Home-brewed beer, produced for non-commercial purposes, using non-commercial equipment, is not subject to excise.
Our broad approach to estimating the gap
We use a top-down methodology to estimate the beer excise gap. This involves comparing:
- beer consumption data from the ABS, with
- data compiled by the Australian Border Force and our beer clearance data.
Clearance data is the number of excisable units (litres of alcohol) of excisable products, cleared for home consumption and reported by excise clients on their excise return.
Because excise goods are taxed by the measurement of volume (litres, sticks or kilograms) rather than their transaction value (as with the goods and services tax), we first estimate a volume gap. This is an estimate of the theoretical volume of beer subject to excise or duty that is delivered into the domestic market, less the total excise and duty for each beer product.
Product classification is based on alcohol strength and beer type – low, mid or full strength beer and packaged or draught beer. Excise is imposed at different rates for different beer strengths, measured by pure alcohol per litre. The theoretical beer excise is the sum of the excise tariff rates multiplied by the volume estimate for each beer product.