Calculating theoretical beer excise and the gap

To estimate the beer excise gap, we:

  1. Use ABS apparent consumption of alcohol data to determine the beer (in litres of pure alcohol) available for consumption in Australia
  2. Make an adjustment for home production of beer (ABS data includes an estimated component for home production of 2.2%, so this amount is removed from the total to obtain figures for beer that is available for consumption and excisable).
  3. Make the data sources from ATO and ABS comparable by calculating a 'gross-up factor' for both packaged and draught beer. This accounts for ATO data omitting the first 1.15% of excise-free alcohol content. It is achieved by comparing the average ABS alcohol strength (percentage) with the average alcohol strength (percentage) based on our data.
  4. Apply these proportions to the ABS aggregated beer production data to derive a weighted average of volume of beer sold by packaging type and beer strengths.
  5. Compare the result to excise and duty data to obtain the volume gap.
  6. Multiply the volume gap for each product type by the tariff rate applicable in each financial year to determine the beer excise gap.
    Last modified: 05 Nov 2015QC 47278