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Howard's End: Dumb Bastards

There is both anger and bewilderment in Greymouth after Dominion Breweries(DB) announced the closure of the legendary Monteith's brewery yesterday, immediately putting 14 out of work and shifting production of this popular West Coast beer to Auckland. But can it still be called Monteith's? John Howard writes.

West Coaster are mourning for their old time identity Monteith's beer which is now to be made in Auckland.

DB Group Managing Director, Brian Blake, says that although demand for Monteith's beer has increased by 250% in the last five years, beer consumption in New Zealand has declined by 27% overall which means there is excess capacity in other breweries that it owns.

He says the economics of keeping the Monteith brewery in Greymouth no longer stack up because the cost to upgade the brewery, because of the beer's success, would not be viable.

Of course, if I made capital investment decisions at other breweries which I ran that now created excess capacity then I'd expect to be taken to task by shareholders.

Ironically, the closure comes when Monteith's beer has been winning international awards.

The company crows on its website www.monteiths.co.nz that " Our master brewer starts by combing pure West Coast water with NZ's finest hops and malted barley.

It then extolles the virtues of open fermentation, no pasteurisation, old oak casks, and even the descendants of the early brewers. In other words, pure and natural New Zealand.

" While some people say nostalgia is not what it used to be, we've always remained true to our origins. It's the reason we've rekindled the classic styles for today's beer lover." the website says.

" The legend of Monteith's Brewing Company has remained virtually unchanged for nearly 150 years." the website continues.

Well, no more. Monteith's is now to be made in Auckland.

With its decision, DB now stands to be accused of a cynical marketing ploy and exploitation of the Monteith's West Coast legend if it continues to call this beer Monteith's.

Mr Blake says the beer itself would not change - but how can that be?

DB has a credibility problem. If the recipe for Monteith's beer includes pure West Coast water, and DB says that it does, then it can no longer be called Monteith's if it is made with Auckland water.

To continue to use that brand would certainly be misleading the consumer unless dramatic and hugely costly changes were made to DB's marketing strategy and consumer product information for the beer.

I'm absolutely convinced that West Coaster's will require that to be done.

The brewery in Greymouth had also become a major tourist attraction with hundreds of overseas people visiting each year. In that context it is a double loss for Greymouth.

Most of the media has picked up on this story with the West Coast MP Damien O'Connor calling DB "Dumb Bastards" and I'm inclined to agree with him.

I just wonder what the shareholders and the overseas parent company of DB are going to say to CEO Brian Blake when they realise his decision seems to have created a massive, and costly to remedy, marketing and public relations blunder.


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