Total alcohol consumption

IBISWorld forecasts that total alcohol consumption will expand by 1.7% over 2025-26 to 236.5 megalitres. A growing population, which inflates the number of adults of drinking age within the country, is a primary driver of this growth. Growth in the number of international tourist nights, driven by a strong interest from travellers combining business and leisure in a singular trip, has supported alcohol consumption, somewhat offsetting indications that younger Australians have a reduced appetite for drinking compared to older generations.

Changes to alcohol taxation influence the composition of alcohol consumption. The current taxation system for alcohol is complex, with various tax rates applicable to alcoholic beverages. Beer and spirits are taxed depending on the type and alcoholic content of the product, while wine and cider are taxed based on their wholesale value. For example, the Federal Government reduced the Wine Equalisation Tax (WET) rebate from $500,000 per producer to $350,000 in July 2018, with knock-on effects elevating prices of cask wine and private-label brands sold in supermarkets at the expense of consumer demand.

The composition of alcoholic beverages consumed has not changed much in recent years. Full-strength beer remains the most popular way to consume alcohol per gram, followed by white wine, red wine and spirits. However, the volume of full-strength beer has been falling in recent years, down from 61,671 litres of pure alcohol to 54,789 in 2023 (most recent data). Over this same time frame, white wine, red wine, other wines and spirits have all elevated in volume of pure alcohol consumed.

Wine consumption has grown to become the most popular category of alcoholic drink, accounting for over 40.0% of alcohol consumed in 2022-23 (most recent data). Spirit consumption has also grown in recent years, driven by a premiumisation trend in alcohol consumption. The number of craft distilleries has substantially increased, with demand for spirits distilled with native botanicals like pepper berry and lemon myrtle rising significantly, along with ingredients found in indigenous diets like green ants. The consumption of RTDs has continued to strengthen, with seltzers resonating with the demands of health-conscious consumers. In turn, spirit and RTD consumption will exceed 20% in 2025-26.

Population growth and increased production have fuelled growth in total consumption. The population aged 18 years and older is growing roughly 2.2% (annualised) over the five years through 2025-26. Overall, IBISWorld forecasts total alcohol consumption to mount at a compound annual rate of 0.9% over the same period.