Wagga pubs to increase cost of beer by up to 40 cents as federal tax on beer rises

Publicans are grappling with the latest 3.7 per cent increase to the federal tax on beer, which comes into effect on February 1 and could see the cost of some schooners lifted by up to 40 cents.

Romano's Hotel owner Matt Oates said the price rise, while frustrating for patrons, was sadly unavoidable.

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"While recovering from COVID, a lot of us [publicans] haven't actually put our prices up over the last couple of years," he said.

"But with increasing wage costs, insurance costs, electricity costs and gas costs we actually just can't afford to absorb the increase."

Mr Oates said the cost of a schooner in Wagga currently ranges from $6.70 to $8, which is "decidedly cheaper" than the retail price recommended by breweries.

The federal tax on beer is tied to inflation and updated every six months. With the Consumer Price Index jumping 7.8 per cent over the past year, this is one of the biggest increases to the tax in recent history.

Tilly's licensee Harry Vearing said the rising cost of beer was simply the latest in a long line of price hikes.

"With inflation over the last 12 months, everything has gone up and beer prices are going to be another one just due to the cost that has been passed on to us. The only way around that is the beer tax going down," Mr Vearing said.

Prices at the bottle shop are also expected to increase when the tax hike comes into effect. The Australian Brewers Association is pushing for a two-year tax freeze on beer sold in bottle shops and for the excise on tap beer to be halved in the May budget.

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