Jos Ruffell: Garage Project co-founder on how the Australian excise tax break impacts Kiwi brewers

Kiwi brewers have voiced frustration with Australia's excise tax break for their brewers - and claimed it gives them benefits that New Zealand companies can't get.

This means New Zealand-produced beer is taxed more than its Australian counterpart, and this dispute between the trans-Tasman partners has been a point of contention for over a decade.

Garage Project co-founder Jos Ruffell says their brewery has had to pay $2.5 million worth of tax in Australia because of this, and this should have been resolved earlier.

"MFAT's looked into this, it's a clear breach of CER and we've had some really encouraging news in the last week where Minister McClay has actually now raised this openly with his Australian counterpart, and he's acknowledged that there is a precedent with wine." 

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Episode Transcript

Speaker 1 (00:00):
Now, Kiwi brewers, as I was telling you the other day,
Kiwi brewers are frustrated at the raw deal that they're
getting in Australia at the moment. What is going on
is that Aussie brewers of beer get a full tax
rebate on the excise, but our brewers don't. And the
dispute has dragged on for more than a decade. Joss
Ruffell is one of the co-founders of Garage Project and
with us.

Speaker 2 (00:19):
Hey, Joss. Hey, how are you doing?

Speaker 1 (00:21):
I'm very well, thank you. How much of a problem
is this for you?

Speaker 2 (00:26):
This has become a huge problem for us. The excise
rebate for Australian breweries is now $ 400, 000 Australian dollars a year.
So collectively for just our brewery alone, we've paid $ 2. 5
million of tax in Australia. We otherwise shouldn't have if
this had been resolved earlier.

Speaker 1 (00:44):
They're doing it for the wine guys, right? And they've
done it for 25 years for our wine guys, giving
them the full tax rebate. Why won't they do it
for beer?

Speaker 2 (00:52):
So this was introduced for New Zealand wineries in 2004,
the wet rebate. The beer excise remission came in in
2012 at a much lower level, but it has been
increased over the subsequent decade to have parity for Australian wineries,
distilleries and breweries who are all now receiving that $ 400, 000.
So the real question is, you know, why aren't New

(01:14):
Zealand distilleries and breweries also having access where New Zealand
wineries are?

Speaker 1 (01:18):
Well, that's what I'm asking you, Joss.

Speaker 2 (01:19):
Why? Why? Well, you know, MFAT's looked into this. It's
a clear breach of CER. And we've had some really
encouraging news in the last week where Minister Maclay has
actually now raised this openly with his Australian counterpart. And
he's acknowledged that there is a precedent with wine. So
we are seeing progress. We just really want to see
that pressure applied and see some constructive discussions now turn

(01:43):
into a solution.

Speaker 1 (01:44):
In terms of export markets, where does Australia rate for you?

Speaker 2 (01:49):
It's our number one export market by far. We have
a team on the ground in Melbourne. We have an office,
a warehouse. You know, this has essentially been an effective
tariff on New Zealand beer. And, you know, we would
have been in a position to actually invest more into
that market if we'd been receiving the excised remission and
playing on a level playing field with our Australian brewery counterparts.

Speaker 1 (02:11):
Yeah, I mean, if you guys got this money back,
you would presumably go up. Like, you'd be able to
sell more, wouldn't you?

Speaker 2 (02:18):
Absolutely. We can invest in more employment in Australia. We
could do more marketing promotion. That drives more production in
New Zealand, more jobs back here. I mean, everyone wins.
It's just a no-brainer that this needs to happen.

Speaker 1 (02:30):
You wouldn't cut the price?

Speaker 2 (02:34):
Well, that's what we're facing in Australia is we're competing
against breweries who have a $ 400, 000 head start and they
can choose not to essentially put excise onto their beers
when they sell it into the market. And as you know,
the excise has grown significantly in both Australia and New
Zealand in the last few years. So that's a massive
disadvantage for us. We're sort of fighting with one arm

(02:56):
tied behind our back there.

Speaker 1 (02:58):
Do you reckon New Zealand beer is better than Aussie beer?

Speaker 2 (03:03):
I think, you know, one of the fantastic things about
the Australian market, as you've seen with New Zealand wine
and our beer, is, you know, they're not afraid to
admit when they see quality. And they love New Zealand wine.
They love New Zealand beer. Yeah. It's a fantastic thing.

Speaker 1 (03:18):
Yeah, I reckon you guys do a better product. By
the way, are you going to do any more of
End of the Golden Weather?

Speaker 2 (03:25):
Well, it's a beer that takes a long time to brew,
and we have got a new batch coming through, but
it takes years for a batch of End of the
Golden Weather.

Speaker 1 (03:33):
How long does it take?

Speaker 2 (03:35):
Well, it's a wild beer, so it's a spontaneous fermentation.
It's aged on central Otago fruit. it's more akin to
a wine in some ways. It spends a lot of
time in barrel.

Speaker 1 (03:46):
Yeah, but how long? How many years?

Speaker 2 (03:49):
We have beer in barrel for several years. We have
some beers that take two, three, four years in barrel
before they're ready.

Speaker 1 (03:57):
I mean, look, I'm getting really specific here. You might
not know, but do you know when you did the
last batch?

Speaker 2 (04:03):
Oh, the last batch? I think two years ago.

Speaker 1 (04:05):
And are you doing it with apricots?

Speaker 2 (04:07):
Yes. Yeah, Central Otago fruit.

Speaker 1 (04:11):
Just so good. You know what? You've cheered me up immensely.
I can't tell you how happy I am to hear
there's more of this stuff coming. Joss, look after yourself
and best of luck. Joss Ruffell, Garage Project co-founder. For
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