The latest Statistics New Zealand inflation figures will
have many brewers and ultimately consumers gazing into their
pint glasses this week as beer excise tax is set to increase
by the highest level in over 30 years. In 2021 New
Zealanders paid $1.22 billion in alcohol excise, set to
increase to $1.3 billion for 2022. An increase of $28.3
million for beer alone.
“The beer excise increase
could not come at a worse time for brewers and consumers,
with the effects of COVID-19 still holding sway on the
economy, the cost of living squarely in focus for New
Zealanders and the hospitality sector far from being back to
normal.” Said Brewers Association of New Zealand Executive
Director Dylan Firth and Brewers Guild Executive Director
Melanie Kees.
Brewers Guild Member and Co-Founder of
Good George Brewing Brian Watson Said “we currently pay
over $3.0 million in excise already, a 6.9% increase is the
same as hiring 2-3 new staff members, a $204k increase on
last year”
“At a time when New Zealanders are
facing an economic crunch, the increase to beer tax is a
hard one to swallow.” Said Firth and Kees
“One of
the most important avenues for brewers is selling their
product through bars and restaurants and the hospitality
industry has suffered badly during the past 2 years and
needs specific support. Yet here is the wider brewing and
hospitality sector being hit with an extra $28.3 million
tax.”
“Under the projected increase the excise tax
would now be $83.08 per keg, $0.55 per bottle and $0.71 per
Pint[1].
All before GST is added.”
“As a sector, increasing
costs brought on by tax make operating in this economic
environment tough. Large and small breweries are having to
make difficult decisions about where to invest or where to
pass on costs”
“In late 2021 our organisations
jointly asked for additional Government support that could
be delivered in an extremely targeted way via an immediate
50% reduction on excise tax for keg beer. This would have
provided a short sharp cost reduction on tap beer supporting
the hospitality sector and when passed on for the consumer
too.”
“Again, we reaffirm our call for this action
to be considered”
“A keg specific excise reduction
such as this is targeted only to hospitality operators, as
kegs are almost exclusively used by bars and restaurants.
This also provides targeted support for small breweries who
generally have higher ratios of product sold through kegs,
as well as often through their own taprooms. What we are
looking to target would be consistent with other peer
markets such as Australia, which has a long-standing
specific excise rates for keg beer and the UK which has for
the last 2 years frozen excise tax completely and created a
new specific keg rate.” Said Firth
“Government has
shown with the petrol excise tax reduction, that is willing
to use novel ideas to solve different cost of living
problems. Over 160,000 New Zealanders are employed in the
accommodation and food service industry, many of these being
pubs and restaurants. With venues seeing huge decreases in
trade since the COVID-19 outbreak a 50 per cent keg beer
would reduce the tax payable on a pint of beer by around 35
cents.”
“The Brewers Association and Brewers Guild
of New Zealand along with Hospitality New Zealand are
calling on the Government to deliver beer tax relief to
pubs, clubs and beer drinkers and other venues through a cut
in keg beer tax. This will see a campaign launched next week
asking for the Government to step in with sector specific
support around reducing keg tax.”
[1] 5% ABV for a
330ml bottle, 425ml pint, 50L
keg
© Scoop Media
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