Australia’s third-largest beer producer says rising costs and government taxes will soon push even the most affordable alcohol further out of reach.
Coopers Brewery managing director Michael Shearer has criticised repeated government excise increases as the standard price of a case of his beer climbs to $65.
Speaking to the Australian Financial Review, Mr Shearer called the twice-yearly excise increases “unsustainable”.
Alcohol excise is increased every February and August, with the rate determined by the drink’s strength. Higher-alcohol products attract a larger tax.
His comments come as Australia confronts the consequences of another major vice tax: tobacco excise, which has helped drive the growth of a billion-dollar illicit market.
A legal pack of 20 cigarettes costs an average of $40, making Australia the world’s most expensive market. About $28 of that price consists of tax. By contrast, a pack bought on the black market costs roughly $12.
Smoking rates were already falling before the excise was introduced in 2010, but they declined by 22 per cent between 2015 and 2020, with the tax contributing to the drop.
At the same time, higher legal prices have encouraged some smokers to turn to illicit tobacco, making overall consumption increasingly difficult to measure.
Coopers Brewery managing director Michael Shearer (pictured) says the twice-yearly increases in alcohol excise are “unsustainable”
Rising alcohol prices have raised concerns that Australia could develop an illicit drinks market similar to the black-market tobacco trade
Legal tobacco sales fell by 29 per cent in the year to September 2025.
However, the Australian Bureau of Statistics cautioned that the figure did not capture total consumption because illegal purchases are difficult to track. Organised crime is thought to account for up to 50 per cent of all tobacco sales.
“With the rise in sales of illicit tobacco products in the economy, the current estimates for consumption of cigarettes and tobacco have declined and detracted from growth,” the ABS said in December.
“The ABS is in the early stages of developing methods to measure the consumption of illicit nicotine-related products to supplement existing measurement.”
Demand for cheaper tobacco has also fuelled an underworld battle for control of the trade. Melbourne, in particular, has seen a series of firebomb attacks targeting vendors.
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Industry figures fear alcohol could face a similar trajectory.
Beer has traditionally been viewed as relatively resilient during economic downturns, but Mr Shearer said rising prices were now making it unaffordable for some consumers.
Others have warned that, without government action, the illegal alcohol trade could eventually reach the scale of the illicit tobacco market.
The amount of tax lost to illegal alcohol sales has more than doubled over the past decade
The Spirits Council of Australia reported last week that illegal, tax-free alcohol now accounts for 14 per cent of total sales.
Steven Fanner, the council’s executive director, said the latest figures confirmed that Australia’s illegal alcohol market was continuing to expand.
“The picture is clear — you have a threefold blowout in the cost of the remission scheme, an alcohol black market costing taxpayers more than a billion a year, and declining revenue from the sale of legitimate spirits,” Mr Fanner said.
“We have an urgent window to act to ensure we don’t repeat the mistakes we have seen occur in tobacco.”
He added that the existence of a billion-dollar alcohol black market was “not a surprise” to industry participants, particularly legitimate producers whose products are being undercut by large volumes of cheap, low-quality, tax-free alcohol.
“The government is losing more than $1 billion a year in revenue, responsible producers are struggling and consumers are being put at risk by products they can’t trust.”
The Australian Taxation Office estimates that $1.23 billion in alcohol tax revenue was lost to illegal sales during the 2024–25 financial year.
That total is more than twice the amount recorded in lost revenue during 2015–16.
Spirits Council of Australia executive director Steven Fanner says high alcohol prices risk fuelling further growth in the illegal market
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