The ATO is exploring the definition in order to separate seltzers, which can be brewed in a similar way to beer but have a significantly different taste and appearance. 

In a draft ruling released in September, the ATO listed a beer as a beverage with a bitter taste, mid-to-low-level alcohol content, and the smell and appearance of a beer base. 

A change to the definition could place certain drinks into the "other excisable beverages" category, which has a higher excise duty rate, or tax, than beer. 

A higher excise rate could cause prices for seltzers, ginger beers, craft beers, and lagers to increase. 

Kylie Lethbridge, chief executive at the Independent Brewers Association, told 6PR radio the change would be a massive blow to the industry. 

"The last nail in the coffin for our small independent craft brewers in Australia," she said.

Lethbridge warned that the decision could drive up the cost of other brewed beverages. 

"We feel a bit like we're in the firing line; this will have a significant impact for a number of brewed products that are beer, even outside of seltzer," she added.

Lethbridge also said the changes could drive up the price of a drink at the pub. 

"Aussies who want to go out, want to meet people ... want to go out to the local pub, have a couple of beers, it's just almost becoming unaffordable," she said.

"Particularly when you've got the cost of living crisis overlaying that."