Post-COVID recovery for brewing - NZIER
New research into New Zealand’s brewing industry shows steady recovery and significant economic contributions despite several years of disruption and supply concerns.
The study by the New Zealand Institute of Economic Research (NZIER) has found that the brewing industry generated close to $900 million in revenue for the government in 2022 and was worth $3.3 billion in the year to September 2022.
The research, Brewing in New Zealand – Economic contribution of brewing, was conducted by independent research company NZIER and commissioned by The Brewers Association of New Zealand to evaluate the brewing industry and its contribution to the economy.
“The brewing industry contributed $896 million last year in GST and excise tax to government revenue,” says Dylan Firth, Executive Director of The Brewers Association of New Zealand. “Excise tax increased in line with inflation by 6.9% in 2022, the largest spike in 30 years. In the year to November 2022, alcohol was responsible for $1.22 billion of excise taxes and duties. Beer alone contributing $401 million.
“The Brewing sector, like many in New Zealand, is seeing a recovery that has brought it back to levels seen before the pandemic. And while the sector has grown in value, overall consumption has remained steady.”
Trends to watch
Dylan Firth says that the report also highlights a slowing in the growth of breweries, following a boom in numbers over the past couple of decades.
“Depending on how you classify a New Zealand brewery, this number is about 200, with just under two-thirds residing in the North Island and one-third in the South,” says Firth. “The number has remained steady since the start of 2019, with the number of breweries closing being similar to those opening. From 2021 to 2022, beer manufacturing jobs increased from 2,000 to 2,150, largely concentrated in the Auckland region.”
He says that another significant trend is the move by New Zealand consumers towards low and no alcohol beers. “Beers with low alcohol content (less than 1.15 % ABV) have seen huge growth, with an increase of 750% in volume since 2019.
Firth also notes a continued shift to low carb beers, with 38% growth over the past year, now making it 13% of the entire beer market.
However, he says one of the biggest issues for beer in the past 12 months has been the difficulties of supply chain and accessing some brewing inputs, such as C02. “Short-term there will be continued shortages of C02 while the Kapuni plant undergoes further shutdowns and limited production through 2023,” says Firth.
“We are working with the government to develop longer-term solutions for the brewing sector who are uniquely placed to recapture C02 through the fermentation process. This will take time and investment, but long term the aim is to utilise the excess C02 and even be able to distribute to others who need it for their food and beverage processing.”
