Australian manufacturing has a future. It’s called craft.

Australian manufacturing has a bright future, maybe. If we can look past the past and into the future; if we can get the government out of the way and let us be awesome; and if people can reconcile that we will never drive an Aussie made car again… If all these things happen Australian manufacturing will thrive again.

Australia’s manufacturing future is craft. It’s good things made in small batches. It’s high quality and ingenuity over mass produced and homogeneous. It’s food and booze not clothing and textiles. It’s stuff where we have a natural competitive advantage, not things where we need hand-outs, leg-ups or trade protection.

Now I’m going to warn you that there is a totally self-serving piece of promotion coming up, so if it makes you uncomfortable, look away. But it gives context. It tells a real story, so here it is…

Three weeks ago I received an email that the gin brand I am lucky enough to be partner in, Four Pillars, had won a Double Gold medal at the World Spirits Competition in San Francisco – at our first attempt. Boom! We had made what good judges thought was one of the nine best in the world. We make this gin in small batches in the Yarra Valley and we’ve been at it for less than a year.

Our win received a little bit of publicity and it was bookended by two other brands winning awards that make me see a bright future for Aussie food and booze. A couple weeks before we won our award, a small whisky distillery in Tasmania, Sullivans Cove, was voted the World’s Best Whisky at a serious and credible competition in the UK. You can read the story here. It is a brilliant result for a small distillery that has been going almost 20 years.

And then last week Cobram Estate, Australia’s biggest olive oil producer, jagged a couple of international awards at a global food showcase in New York. And this was the second year in a row it has happened. And yes, thanks for asking, I know and like the Cobram Estate guys and I’ve met and tasted the Sullivan’s Cove drinks and yes I am massive fans of them both.

It is important to note we are craft, not “cottage” industries. We are serious brands wanting to take great products to the world. But with one simple caveat:

PLEASE, can I beg our Treasurer and his mates TO GET OUT OF OUR WAY.

Get this – the Federal government makes almost THREE TIMES more revenue out of one bottle of our gin than we, the producer, do. Yep that’s right. We make around $12 per bottle (and then we take out COGs and expenses) and the Feds get $24 excise plus $5 GST – so close to $30 PER BOTTLE! It’s INSANE.

And it makes Australia the highest taxed spirits industry in the world. An American craft distiller is taxed 10 TIMES less than we are. Yes, granted, we like Austrade but this sort of punitive tax regime HAS to be fixed to allow more of us to flourish and employ many more thousands of people in our craft industry.

And don’t start me on us being part of the alcohol “problem” this country supposedly faces (which it doesn’t, but that’s another story).

OK, political soapboxing complete.

Here is a message – to the cheese and ice cream makers, the olive oil producers, the distillers, the winemakers, the brewers, the bakers and the tea and coffee makers… WE, yes WE are the future of manufacturing for this country. We manufacture things that are the world’s best and we showcase them proudly across the globe. And we win. We show that Australia is a sophisticated, tasty, discerning, clever, creative and crafty country.

Long may Aussie manufacturing reign. I reckon we should all drink to that. Who’s with me?

14 thoughts on “Australian manufacturing has a future. It’s called craft.

  1. Why on earth are alcoholic drinks not taxed at the same rate? Every bottle of booze contains “x” number of standard drinks. So why are spirits taxed at a much, much higher rate then the other categories of alcohol (beer/wine). The Henry Tax review recommended the Government address this imbalance, yet they’ve completely ignored it. The Australian wine Industry has lobbied hard to maintain the status quo, as its skewed in their favour. If the Government actually gave a crap about promoting responsible drinking then a standardised rate is the way too go. This would encourage people to drink lower ABV drinks.

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  3. can you expand upon “And don’t start me on us being part of the alcohol “problem” this country supposedly faces (which it doesn’t, but that’s another story).” ?

  4. I think that current situation in Australia shows that this country will not have a bright future, I am working in VET education sector and what is now happening is that the government prefers to put funds to private institutions, where the profit is most important rather the skills taugh, as I came originaly from Germany, I can only laugh about this system of education, the private schools cut the courses to weeks and distribute a certificates as hot bread, it is wastage of tax payers money anyway (eg: one RTO in Melbourne offers to be a pastry cook in 17 weeks) in Europe you have to study 3.5/4years for the same qualification. Education is a base of creativity, improvement, invention and good economy, also what I noticed here, most companies planning just 3 months ahead, in Germany years ahead, so there is missing consistency and other problem is cost of labour is not relevant to skills of labour in other words, australian product is more expensive than the German one, I believe that if the price would be the same between these two, many people would grab the Made in Germany one rather than Australian made one.
    Look the Aldi, VW, Bosch, AEG, If you ask me if I know some really good Australian company, because of quality products, I am not able to answer this question, even in Europe I did not see any australian products except of wines(which are even cheaper there as here), so what future has this country?

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  6. Couldn’t agree more – this is a complete nonsense and a huge disincentive to all the potential craft distillers out there (not to mention all the various challenges they face trying to actually get a new distillery opened in the first place…. By the way congratulations on your double gold – well done!

    • Mate it’s tough to make a quid but enormous fun, we don’t want handouts we just want a fair go. Happy to pay crap loads of company tax on our enormous profits when we make them. That seems a fair deal! Current structure simply wrong

  7. Stuart, I agree 100% with you comments and if we as an industry don’t make ourselves heard we will lose more of our manufacturing industry and for such a young country we should be leading the way.

  8. Hi Stuart – whilst I agree in part with the sentiment behind this, as fabulous as many of these craft products are, most of them are niche, and are insufficient to base an economy around. For a start, the market can very quickly become flooded with artisan produce (and the inevitable copycats, both domestic and overseas), which are often very high priced. Also, it’s a huge step between a hobby (given up your day job yet?) and a viable small business, let alone one that is scalable and sustainable.

    Plus, many people simply lacks the skills, creativity, initiative and other attributes necessary to see through a product from idea to commercialisation, and then to run the business. Add to this, Australia-wide, there is a huge dearth of investment capital for SMEs in all sectors (much of it goes into real estate and home renos instead, as our tax system currently favours them) and many SMEs are brought unstuck by lack of working capital. Another problem area is path to market and market access. Tried getting a product into a major supermarket lately (profitably)?

    I’m not saying people should not try, but they need to do their market research and small business skills training first (personally, I’d love to see more of this taught in schools). As one artisan spirits producer said to me lately “awards are great but they don’t pay the rent or wages”.

    • Hey there, I agree with everything you say especially about education. I think people should get more encouragement from any number if areas. Banks, govt, schools… But there are more routes to mkt now not just bricks and mortar

      • Hi again Stuart – certainly in small/regional economies, SMEs are a beacon of employment and income-generation hope, and every effort should be made to encourage them IMHO. A change of attitude by State government ‘economic development’ organisations would be a great start, with new policies to favour SMEs over the cargo-cult large ‘saviours’ that seem to become burdens on the taxpayer (either directly or with massive subsidies). Govts and regional authorities also need to get a lot cluier about digital support. As you say, online is an important route to market; farmer’s markets (unless they attract tourists) generally are recyling local $, not bringing new cash in.

  9. Great post Stuie, the average punter doesn’t have a clue that they are paying this much tax – or that it increases automatically twice every year.

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