Photo: Benito Martin
REVOLUTIONARY GIN
GIN AND TAXES
FOUR PILLARS BLOODY SHIRAZ GIN.
FAST FACTS • Kangaroo Island Distillery won Best Contemporary Gin at the 2019 International Wine and Spirits Competition, the first Australian gin to be awarded a trophy in the prestigious competition. • The category of ‘Navy Strength’ gin (57 per cent alcohol) refers to the fact that the British Royal Navy used to test a gin by igniting it, which proved it hadn’t been diluted. • There were 168 gin entries in the 2019 Australian Distilled Spirits Awards, far more than liqueur (49), whisky (35) and rum (27). • A mixture of gin, Campari and sweet vermouth garnished with an orange peel, the Negroni is now 100 years old, having been invented by Count Camillo Negroni in Florence, Italy, in 1919.
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gins from across the world, we would win. We have a natural affinity for flavour and our local environment is pure and natural.” Having launched in regional Victoria’s Yarra Valley in 2013, Four Pillars was one of the first Aussie gins on the market. It has grown at an average rate of 83.4 per cent a year since it launched, and in March 2019 multinational brewing giant Lion acquired a 50 per cent stake in the business. Now available in more than 25 international markets, it is expected to soon overtake Hendrick’s Gin as Australia’s most popular premium gin brand. “We want to become Australia’s global spirit brand,” says Gregor. “We needed a partner that would help us go to scale internationally, but also help us expand our home experience. We are doubling our Healesville distillery and bar in 2020.”
There is one issue that is impeding the growth of most of Australia’s gin distilleries: tax. As of October 2019, the excise duty on spirits is $85.87 per litre of pure alcohol, compared to $50.70 per litre of full-strength beer, and wine that is taxed at 29 per cent of its wholesale price. When you add GST, it can mean that some distillers are paying nearly 50 per cent of their total revenue in tax. “The excise regime in Australia is very punishing and it really makes no sense,” says Gregor, clearly exasperated. “Every six months the excise is increased, which means every six months our cost of production goes up. Since we opened we have had 13 tax increases, but the wine industry hasn’t had a tax increase in 17 years.” According to the 2019 Ginventory Survey conducted by The Gin Boutique, 55 per cent of distillers said their number-one barrier to growth was excise and taxation costs. “Price point is a massive constraint for consumers as well,” says co-founder Glenn McPhee. “An Aussie gin will cost $40 to $45 on a US shelf but $70 to $80 on an Australian shelf. Still, 20 per cent of respondents said they buy more than one bottle of gin a month.” Despite the cost barriers for small producers, a new distillery is opening in Australia almost every week. With expressions like Four Pillars’ Bloody Shiraz, Archie Rose Distilling Co.’s ArchieMite Buttered Toast and Adelaide Hills Distillery’s Green Ant, it’s clear Australian distillers are keen to make their mark on the gin world. “Gin can express a place like no other spirit,” reveals Gregor. “It is the number-one spirits category by miles and it will continue to grow with different expressions using native botanicals that reflect our ‘place’, our Australia.”