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Price of Beer Expected to Increase

Price of Beer Expected to Increase

By Angela Beswick

The cost of the after-work beer is set to rise come July as brewing companies Lion Nathan and DB look at price increases of at least 4 per cent.

The increases come as breweries try to recover some of the money lost through significant increases in the costs of raw materials and packaging.

In an interview with the New Zealand Herald DB Breweries managing director Brian Blake says the cost to breweries over the last 12 to 18 months has probably been the biggest increase the industry has seen for some time.

This rise occurs before the beer has even hit the bars and Asa Campbell, bar manager at Quarry on the North Shore says that end-sellers like bars and supermarkets will have to increase costs to make money on what is costing them more to provide.

“We've decided to drop our prices and change our glasses so they hold 30 mls less. This way our price is lower, and although the glass is insignificantly smaller we won't have to put the price up to compete with the rising cost price of buying the beer,” Campbell says.

Bradley Jenkins, a 21-year-old student says he doesn’t think that the increased cost to buy a beer will change the amount or the way that he drinks.

“At the end of the day, if I’m going to go out and drink I’m going to spending ridiculous amounts anyway. If anything, I’ll just buy cheaper beers before I go out, drink heaps of them and drink less in town. Increases in prices won’t change the drinking culture in New Zealand”, he says.

Campbell agrees with this, saying that if bars were the only end-sellers to increase their prices then it will probably change the way people drink. However, he says, if the change is across the board, then people will have no choice but to pay the price for their after-work beer.

“There is the risk that bars may increase prices on everything, and try to recover the costs elsewhere,” Campbell says, indicating that wines and spirits may also be affected.

DB breweries are looking at as much as a six to seven per cent price rise, while Lion Nathan say an increase of at least four per cent will be inevitable.

The industry on the whole generally resets its prices on July 1, when the Government's annually revised excise rates on beer come into effect.


Angela Beswick is a Journalism Student at AUT

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