Beer industry in good cheer despite Covid hit
New Zealand’s brewing industry is growing and now worth $2.7 billion, an increase on the $2.3b it was valued at last year.
According to a new industry report by the New Zealand Institute of Economic Research (NZIER), New Zealand now has 257 breweries, and brewers added more than $630 million to gross domestic product in the 12 months to March 2020.
The industry supports 7000 jobs, employing 2200 people directly, and contributed $810m in GST and exise tax in 2019.
On-licence sales of beer accounted for $1.7b while supermarkets and liquor stores accounted for $1b worth of sales in the year. On-licence premises sales account for 60 per cent of all beer sales by value, but store sales dominate by volume.
An additional 11 breweries have launched over the past year, with the number of breweries per capita the highest since 2000. New Zealand now has more breweries per capita than Britain, Australia and the United States, the report outlines.
While the figures presented in the report were positive and demonstrated a healthy brewing sector, Dylan Firth, executive director of the Brewers Association of NZ, said this was before the Covid-19 pandemic rocked the economy.
The report found that the closure of bars and restaurants alone due to the first Covid-19 lockdown cost the country an estimated $300m in sales.
Firth said he did not expect that number to be so high, and it would take the industry a couple of years to recover, especially if the borders remain closed to tourists. Tourists spent $400m on beer in the year to March 2020.
“We won’t know the true effect until the end of March next year, but it looks like it is going to be a pretty busy summer; Kiwis are out spending money, people are travelling around a bit so there is a bit more of that spend,” Firth said, adding that Kiwis were spending up large and would hopefully make up some lost revenue that would otherwise be footed by tourists.
Breweries in regions such as Hawke’s Bay and the Wairarapa were experiencing good growth since the end of lockdown, Firth said. “Looking up until March, we were in a really good position, things were on the right track. Most of this year and into next year will be a tough one for a lot of [businesses] and the sector probably won’t fully recover for a couple of years.”
The New Zealand brewing industry uses $24m worth of hops annually, most sourced from the Tasman region.