Hopes high for NZ’s premium spirits in 2025

Spirits NZ says that despite a tough 2024 for the local spirits industry, there are encouraging signs for premium spirits as 2025 gets underway.

Chief Executive of Spirits NZ, Robert Brewer, points out that in 2024 New Zealand spirits producers were dealing with tax that is double that of wine and beer, along with consumers drinking less and economic headwinds. But he says there are some hidden positives.

“Not many people realise that 60-70% of the retail price for full strength spirits is made up of excise tax and GST. This means it doesn’t take much to trim slim profit margins should the economics of the industry change,” says Robert.

“Yet 2024 has also shown the resilience and commitment of local producers to produce fantastic product and there are signs amidst the harder times that the sector is continuing to grow.”

He says that spirits have been somewhat insulated from the volume drops that wine and beer have been experiencing globally and in New Zealand because of two key factors.

“Although consumers are drinking less and less harmfully, when they do spend they tend to buy premium which is right in the spirits industry’s sweet spot,” says Robert. “Add to this the popularity of gin and of the so-called ‘cocktail culture’ and you can see why there has been a slower decline in NZ spirit consumption – nominally down about 3% compared with October last year.”

“We’re also seeing continued product diversification with increases in aged or ‘brown’ spirits such as rum and whiskey,” says Robert.

He cites the near record number of entries in 2024’s New Zealand Spirits Awards as another sign that local producers continued to do their best to push through tough times.  In the six years the Awards have been running only one year has topped the 451 entries in 2024’s Awards.

“Twenty years ago you could have counted the truly commercial New Zealand distilleries on two hands.  Today, there are almost 200 and although some will struggle given the current trading environment I get the sense that, in true Kiwi fashion, most will come through and continue to put New Zealand on the global map as a premium spirit producer.”