Australian craft beer is in the middle of its first sustained contraction since the industry’s 2010s boom. The Independent Brewers Association recorded more than twenty independent brewery closures or administrations in 2024-25, including names the segment had treated as strongholds: Deeds, Wayward and Hawkers each entered administration in the window.
The cause is not a single bad thing. It is a stack.
The excise problem, unapologetically
Australia’s beer excise is the third-highest in the world, and it is indexed twice a year, in February and August, to CPI. As at February 2026, the full-strength draught rate sat above $44 per litre of alcohol and the full-strength packaged rate above $62 per litre of alcohol, after the August 2025 indexation resumed following the 2024 Budget’s two-year pause on draught indexation.
For a small independent brewery producing, say, 500,000 litres of packaged beer at 5.0 per cent alcohol, the federal excise line alone is a six-figure annual cost that is not, at the relevant volumes, softened by the small-producer offset to the point where margin works on mainstream pricing.
The Independent Brewers Association, under chief executive Kylie Lethbridge, campaigned through 2025 for an excise freeze. The 2024 Budget gave them a two-year pause on draught indexation. That pause ended in August 2025. Indexation has now resumed at the pre-pause cadence.
The volume problem
The Australian Bureau of Statistics’ apparent-consumption-of-alcohol data for 2024 recorded per-capita beer consumption at multi-decade lows. That is not a craft-specific problem; it is a whole-category problem. Australian drinkers are drinking less beer, and when they do drink beer they are drinking it in venues where the cost structure is the venue’s not the brewery’s.
That shift interacts badly with the craft cost model. Craft breweries built through the 2010s on the assumption that consumers would trade up to higher-price, higher-margin beer. The trade-up happened. The trade-up to bigger volume did not. For a brewery at 800,000 litres of annual production, the difference between 3.5 per cent market-average volume growth and flat consumption is, over three years, the difference between scale and contraction.
The distribution layer
Carlton & United Breweries (Asahi) and Lion continue to dominate Australian beer distribution. The consolidation at the wholesale layer through 2023 to 2025 (ALM and Paramount Liquor among others) has reduced the route-to-market options available to independents further. An independent brewery that would like to get into a Dan Murphy’s or BWS listing in 2026 is negotiating with fewer, larger counterparts than the same brewery would have negotiated with in 2018.
The Drinks Trade and IBA commentary through 2025 has been unanimous on this point. The wholesale layer has become harder for independents, not because the layer is behaving badly, but because it has consolidated. Consolidated layers have less patience for small suppliers with small volumes.
We used to fight the excise. We fight the logistics now. The excise we understand. The logistics we cannot, no matter how good the beer is, reshape from a small brewhouse.
The container and energy additions
Two cost lines that had been background items for most of the 2010s became visible in 2024-25: container deposit scheme costs and energy bills. Container deposit scheme compliance adds roughly 3 to 5 per cent to COGS per IBA member surveys. Energy bills through 2025 added another margin point to most brewery cost structures.
Neither of these is, on its own, fatal. Both on top of the excise line in a softening volume environment is.
What the survivors are doing
The independent breweries that are still trading, and trading profitably, at the time of writing share a short list of properties:
- They own a venue. The taproom captures both wholesale margin and retail margin on the beer it pours, and captures food and beverage margin on the rest of the ticket. Most of the 2024-25 administrations were wholesale-dominant businesses without a venue.
- They have shortened their range. The 14-SKU core line-ups of 2019 are now 6-SKU core line-ups with one or two limited releases. The reduction in SKU count has materially reduced the working-capital tied up in packaged stock.
- They have priced up, not down. The breweries still profitable raised packaged retail prices 6 to 9 per cent in 2024 and another 4 per cent in 2025. The volume loss from those increases was less than the margin recovery. That is a specific, recoverable pattern that most in-trouble breweries did not follow early enough.
The IBA’s ongoing advocacy is useful. It is not sufficient. The Australian craft beer sector in 2026 is smaller than it was in 2022, and will be smaller again in 2027.
The beers the surviving breweries are making are, on every sensory measure, better than they have ever been. The industry’s problem is not the beer. It is everything around it.