Already paying some of the highest taxes on spirits in the world, Australians are being warned to expect further cost increases.

Distillers and spirits manufacturers are calling for a freeze on alcohol excise rises as the price peaks at a milestone it had not been expected to hit before 2029.

The excise tax on spirits increases twice yearly in line with the Consumer Price Index (CPI).

The latest excise increase follows hikes of 4.1 per cent last year and another 3.7 per cent in February.

Distillers SA executive officer Ali Lockwood said that compared to the wine industry, the taxes on spirits seem “extraordinary”.

“Cask wine is [taxed] at six cents a standard drink, a bottle of wine is 24 cents, and spirits is $1.24,” she said.

Lockwood said increasing taxes would put the brakes on a burgeoning industry and impact the wider South Australian economy, especially in the regions.

“We are forecasting that by 2030 total domestic and international South Australian spirits sales will grow from $120 million to $180 million,” she said.

“But with high taxes such as this and with discretionary items such as spirits being the first thing that people stopped buying, this [tax increase] is not going to help the growth of this new sector.

“It’s going to impair tourism. It’s going to impact regional growth and employment as well.”

Australian Distillers Association chief executive Paul McLeay said the increases were unsustainable and it was crucial to support the industry comprising more than 600 distilleries – primarily small family-owned businesses in regional areas.

“If the government is serious about building a broader, deeper industrial base and the creation of manufacturing jobs in the regions, it must reconsider this punitive excise regime that disincentivises producers to invest in and grow their businesses,” he said.

The tax hike compounded industry-wide challenges, he said.

“Unfortunately, we have already witnessed a few insolvencies this year, and this latest spirits tax increase will be extremely difficult for distillers to stomach,” McLeay said.

Australia already has the third-highest spirits tax in the world, Spirits and Cocktails chief executive Greg Holland said.

“Approaching the $100 per litre threshold six years earlier than previously forecast must surely give the Federal Government pause to reconsider this handbrake on the spirits industry.

“Australia already has the third-highest spirits tax in the world. These automatic excise increases can’t continue unchecked. If not now, when will it stop?” Holland said.

Diageo Australia, the company behind Queensland’s iconic Bundaberg Rum Distillery, said the current tax regime was becoming “unbearable”.

“We know our loyal Bundy consumers love our product, but many of them don’t know that more than 60 per cent of the money they already pay for a bottle of Bundaberg Rum UP goes straight to the taxman in Canberra, and that tax keeps growing and growing,” managing director Angus McPherson said.

-with AAP