In the vibrant and rapidly evolving world of Australian craft spirits, the Australian Distillers Association (ADA) is pivotal in advocating for the industry's growth and sustainability. We sat down with David Ridden, QLD President of the ADA, and Paul McLeay, Chief Executive of the ADA, to discuss the association's current initiatives, the challenges faced by the industry, and their vision for the future. From tax reform and regulatory support to promoting responsible consumption and encouraging innovation, Ridden, and McLeay provide valuable insights into the work being done to ensure the continued success of Australian craft distillers.

As the President of the Australian Distillers Association (Queensland), can you tell us about the ADA's current initiatives and priorities for supporting the craft spirits industry in Australia?

The Australian Distillers Association is a member-based organization that represents craft distillers across Australia. We support our industry by advocating to the Government to unlock investment and accelerate the development of the Australian spirits industry, the regulatory and policy settings – including excise duty – need to nurture and promote a supportive commercial environment for businesses to take the risk of greater investment. Secondly, we support and develop initiatives such as the Artisan Producers license, improved safety and training, and professional development for craft distillers.

The ADA has been actively involved in advocating for fair and sustainable tax reform for Australian distillers. What are some of the key challenges you've faced in this area, and what progress has been made?

Australia has the third highest spirits tax in the world (behind only Iceland and Norway). The excise of spirits is now in excess of $100 ($101.85) a liter and there is no end in sight to this, with twice-yearly CPI-linked excise increases. Due to rampant inflation, this tax has passed the $100 a liter threshold six years earlier than forecast. There are now more than 100 distilleries across the QLD but many cite the tax as a handbrake on growth. There is a tax-free threshold of the first $350,000 in excise that does not get paid, but even with this, we know that it is an effective handbrake to growth and a disincentive to achieve scale.

Image: “OUTRAGEOUS” $100 SPIRITS TAX CONFIRMED; Source - Australian Distillers Association

Could you share some insights into the impact of the Future Made in Australia Act on the spirits manufacturing industry and the ADA's efforts to support this initiative?

The Future Made in Australia Act appears to focus on economic advantages and compelling national security imperatives for supply chains and producers of green hydrogen and critical minerals as Australia heads towards an orderly path to net zero. Having said that, we welcome the sentiment and signaling of a Government that wants existing industries to have a future made here. Distilleries, especially in QLD, can be located anywhere. The significant majority of QLD distilleries are in regional areas, bringing important economic benefits to the regions.

With the Australian spirits industry poised for significant growth, how do you envision the ADA contributing to the industry's success, particularly in terms of export markets and innovation?

According to the Spirits Industry Survey published by Deloitte Access Economics earlier this year, while only 17% of spirits manufacturers currently export, this figure is likely to grow, with 40% interested in exporting. As international demand for premium spirits continues to grow, there has never been a better time to invest in the future of the Australian spirits manufacturing industry by developing a spirits industry export strategy. We are actively working with Trade and Investment Queensland, who have been fantastic, but more needs to be done so which is why we have called on the Federal Government to support an industry export plan.

Image: Australian Spirits Winning Accolades at the London Spirits Competition 2024, (Left to Right) Happy Sun Pineapple Mango Vodka, Billy Stitch Summer Gin, Gallivanter Gin, Archie Rose Dry Gin, 23rd Street Quattro Gin, Poltergeist Gin, Artisan Settlers Yuzu Gin, Hunter Island Tasmanian Pot Still Wishky PX, Kangaroo Island Spirits O'Gin

As a founder of the Queensland Distillers Association, what role do you believe regional associations play in supporting the overall goals of the ADA and the craft spirits industry in Australia?

As a state organization, our role is to support our members with state-based issues, like liquor licenses, council town planning, training, and advocacy to achieve better support for our industry around tourism and export opportunities for Queensland spirits producers. All of these align with what the ADA does from a Federal Government point of view.   

Image: ADA Committee members; Source: ADA 

Granddad Jack's Craft Distillery has achieved remarkable success in a short period. How has your experience with Granddad Jack's informed your approach to leadership within the ADA and the wider industry?

At Granddad Jack’s our attitude is to think differently about the spirits business. We are bad followers because if you follow what everyone else is doing, then you can never pass and therefore never achieve what’s possible. We are storytellers who just happen to make world-class spirits. This is how we have managed to grow our business not just in Australia but around the world. I bring this same attitude to my role as President of Queensland Distillers. Because if as an industry we keep doing the same thing year after year we will fail. I encourage our members to think like us, look for new opportunities, and new ways to sell their spirits, become storytellers, and export their spirit to the world. I continue to tell the government this same story as we need to improve access to the market for our members and that’s going to mean we need to change some outdated liquor license laws in Queensland. I’m focused on this as I want the world to see that spirits made in Queensland are world-class. 

Image: Greenhouse Gin, Granddad Jack's Distillery, Double Gold Winner at Bartender Spirits Awards 2022.

Can you share any upcoming projects that Granddad Jack's Craft Distillery is working on?

We will open our first European Granddad’s Bar in Copenhagen in the last quarter of 2024, which we are very excited about. Our plan in the next five years is to open a Granddad’s Bar in every country that we export to. These bars are our flagship stores showcasing our brand story and only sell spirits made by us. We opened our first Granddad’s Bar in Newcastle hours north of Sydney in January this year with outstanding success to date. 

The ADA aims to promote the responsible consumption of alcohol. How does the association work to achieve this goal while also supporting the growth and development of the spirits industry?

Australians are drinking less. AIHW data shows the proportion of people aged 14 and over engaging in risky drinking has declined from over 20% in 2001 to under 17% in 2019. The Australian Craft spirits industry is a strong advocate for moderation - we know people are drinking less but they’re also drinking better. We are also signatories to the Alcohol Beverage Advertising Code, which has been regulating alcohol advertising in Australia for the last 25 years. The ABAC code is among the strictest codes governing the marketing of alcohol anyway in the world, it prohibits: 

- Promoting alcohol to any audience unless more than 80 percent of people are over the legal purchase age. 

- Utilizing influencers, actors, or models who are, or appear to be, under 25 years of age. 

- In addition to ABAC, alcohol producers are required to adhere to: 

 - Australian Competition and Consumer legislation;

- State Liquor Licensing legislation and promotional guidelines;

- Australia New Zealand Food Standards Code labeling requirements;

- Australian Association of National Advertisers Code of Ethics;

- Commercial Television Industry Code of Practice;

- Commercial Radio Codes of Practice; and

- Outdoor Media Association Code of Ethics, Alcohol Policy and Placement Policy.

Looking ahead, what are your hopes and aspirations for the Australian craft spirits industry, and how do you see the ADA contributing to its continued success and growth?

The industry has much to be proud of. We also have much to look forward to. A vibrant and healthy spirits industry can help showcase Australia to the world, promoting growth in domestic manufacturing, increasing trade and employment, supporting innovation and technology, and helping to grow the industry. One of the many ways that Australia can define its place in the world is through the export of high-quality food and beverages. Simply put, nothing tastes like Australia. Global consumer interest in distinctive, high-quality spirits presents a major export opportunity for the Australian spirits manufacturing industry. But, the current policy settings of our industry are holding us back. The Federal Government needs to pause the twice-yearly increase to excise and work with the industry to put in place appropriate rules and regulations.

Image: 2022 Annual Conference, source: ADA

Conclusion:

As the Australian craft spirits industry continues to flourish, the work of the Australian Distillers Association remains crucial in supporting and advocating for distillers across the country. David Ridden and Paul McLeay's insights highlight the importance of fair tax policies, robust regulatory frameworks, and innovative thinking in driving the industry forward. With a focus on responsible consumption and the potential for significant growth in both domestic and international markets, the ADA's leadership and initiatives are set to ensure that the Australian craft spirits industry not only thrives but also sets new standards on the global stage. The future is bright for Australian distillers, thanks in no small part to the dedicated efforts of the ADA.

Header Image: (Right) Paul McLeay, Chief Executive of the ADA, and (Left) David Ridden, QLD President of the ADA

In conversation with Malvika Patel, Editor and VP, Beverage Trade Network