Brewing Sector Sees Over 100% Increase In ‘alcohol Free’ Beer Consumption But Overall Beer Consumption Sees A Decline
Brewing sector sees over 100% increase in ‘alcohol free’ beer consumption but overall beer consumption sees a decline due to COVID-19.
“The latest release of alcohol available for consumption data from Stats NZ shows beer under 1.15% produced for the year ending December 2020 increased 105%. This shows that New Zealanders are getting in behind the no alcohol category and following international trends in the beer market.” Says Dylan Firth, Executive Director of the Brewers Association of New Zealand.
“Thanks to the investment in the low/no alcohol beer category from major brewers, consumers are becoming more accepting and familiar of the low/no-beer as a quality product.” Said Firth
“However, within the positive trend of consumers choosing innovative products, the brewing sector has been hit by the ongoing changes to alert levels.” Said Firth
“Overall, beer available for consumption was down (-1.4%), where both spirits (+5.2%) and wine (+4.3%) were up. This reflects the continued return to level 3 in Auckland and March 2020 lockdown impacts on the brewing sector. Unlike spirits and wine, beer consumption in most cases makes up a larger proportion of sales in hospitality environments vs wine and spirits.” Said Firth.
“The brewing industry, like many other sectors in New Zealand, had a difficult 2020. With two of the most valuable channels to market closed during the March 2020 lockdown, through bottle stores and hospitality venues and the yo-yo-ing of alert levels in recent months. This has had a real impact on those in the brewing industry and with the wider hospitality industry still at a fraction of where it was pre-COVID-19, there is a long road to recovery on the horizon.” Said Firth
“The brewing industry is a major contributor to the ongoing success of the New Zealand economy – contributing $2.7 billion in beer sales in the year to March 2020. There are at least 257 commercial brewing operations throughout the country employing thousands of New Zealanders and the brewing industry contributes over $634 million to GDP. Not to mention the $411 million paid to the government in excise and excise equivalent duties in 2020.” Said Firth
“We see a real opportunity here for targeted support for the hospitality sector especially given the fact the government declined to support the sector by refunding excise tax on kegs that were spoilt during last year’s lockdown. How to best target that support is something the Brewers Association will be approaching the government about. Producers have supported the wider hospitality sector by taking back kegs that cannot be sold, investing in marketing campaigns and assets to assist bars and restaurants as well as other support.” Said Firth
“The COVID Support Payments and wage subsidy remain critical to the basic survival or many outlets, as they help cover operating expenses, but they will not suffice to keep many operators from going out of business, with consequential impact on employment, GST and income tax revenue.“ Said Firth