ELECTION PRIORITIES 2023
BREWING SECTOR PRIORITIES
THE BREWERS ASSOCIATION OF NEW ZEALAND (BANZ) IS A MEMBER-LED, NOT-FOR-PROFIT ORGANISATIONREPRESENTING THE TWO LARGEST BREWERS IN NEW ZEALAND. OUR MEMBERS, LION NZ AND DB BREWERIES LTD, PRODUCE APPROXIMATELY 80% OF BEER BREWED IN NEW ZEALAND.
Beer is a significant contributor to the economy and is a valued part of New Zealand culture. BANZ is committed to promoting responsible consumption of alcohol. Our core principles include:
a) As a lower alcohol and natural product, beer can be part of a balanced lifestyle when enjoyed in moderation.
b) The brewing industry is part of our culture and heritage, playing a significant role in New Zealand’s economy due to its important role in the agricultural, brewing, tourism, and hospitality sectors.
c) We support targeted efforts by industry, government, and the community to reduce alcohol misuse.
BREWING IN NEW ZEALAND
Brewing is a $3.3b industry in New Zealand, contributing to the economy through:
Supporting jobs throughout the supply chain, (6700 jobs from barley to bar)
Producing hops and malt
Supporting the hospitality industry
Supporting NZ’s tourism industry
Contributing $896 in GST and excise tax
This document outlines focus areas the brewing sector could work with an incoming Government on.
Supporting safe and moderate consumption;
A sustainable operational and economic environment; and
Environmental sustainability.
The top three priorities within these are:
Capping excise increases and developing a keg specifical excise rate.
Improving the alcohol licencing regime to include better suitability of applicant provisions, clarity on what licencing conditions are appropriate, repeal parts of the recent Sale and Supply of Alcohol (community participation) Bill and enabling 0% alcohol beer as the required low alcohol option in on-licences.
Government partnering with industry on alcohol harm minimisation activities such as those the sector already funds.
SUPPORTING SAFE AND MODERATE CONSUMPTION
The Brewers Association will work with Government to:
Support existing industry initiatives so, the Government, through the alcohol levy and its review, can work towards educating consumers to reduce harmful consumption.
Enable growth in the no and low alcohol products, including improving taxation of lower strength beer.
Amend Section 52 of the Sale and Supply of Alcohol Act to include the provision of 0% alcohol products in on-licences as an alternative to the current mandatory ‘low-alcohol’ requirement.
The Brewers Association of New Zealand will work with Government to promote safe and moderate consumption of alcohol through industry-supported initiatives. In addition to excise tax of over $1.29b, the alcohol sector contributes $11m every year towards health promotion activities through the alcohol levy. Working alongside government, BANZ and our members are best placed to communicate moderation messages directly to our customers. The current alcohol levy review and structural changes to the health system will allow Government to work together with industry on initiatives to reduce alcohol related harm.
Responsible consumption of alcohol can be an enjoyable part of a healthy lifestyle. Hazardous drinking and underage drinking rates have fallen over recent decades. New Zealanders 15 years and over drink 23.4% less alcohol now than in 1987, per head of population. The latest Ministry of Health statistics show the highest prevalence of hazardous drinking was among 18-24 year-olds at 31%. This group has also seen the greatest reduction, down from 37.1% in 2007/8 (a 6.1% absolute decline and 16.4% total decline).
While beer is already a low alcohol choice, brewers’ investment and innovation in lower and no-alcohol options promotes responsible consumption, creating an opportunity to align our business with public health objectives.
The World Health Organization acknowledges that lower and no-alcohol beers have the potential to help achieve Non-Communicable Disease and Sustainable Development Goal targets for reducing the harmful use of alcohol.
BANZ MEMBER PRIORITIES
We support and co-fund SMASHED, an in-school education programme run by the Life Education Trust which has reached 60,000+ Year 9 and 10 students since its inception in 2019. The programme aims to communicate to young people the importance of being able to say no to alcohol and how to deal with issues around peer pressure and hazardous alcohol consumption.
Our on-going focus on innovation in low and no alcohol beers which continue to see exponential growth, provides options to increasingly health-conscious consumers who choose to switch out alcohol options for non or low alcohol products.
Member initiatives include:
o Alcohol & Me – Lion’s online and seminar-based interactive educational programme.
o Heineken’s When You Drive, Never Drink, a behaviour-change programme and campaign to reduce drink driving in New Zealand.
o Utilising the connection and the platform our brands have with consumers to promote responsible messaging.
A SUSTAINABLE OPERATIONAL AND ECONOMIC ENVIRONMENT
The Brewers Association will work with Government to:
Develop a prioritisation model for label change requirements in New Zealand.
Cap the excise rate to align with the range given to the Reserve Bank via the monetary policy remit, to keep CPI within (1-3%.)
Apply a keg specific excise rate 1/3 less than the existing rate for beer.
Modernise the regulation around e-commerce alcohol sales.
Establish a dedicated ministerial portfolio for the hospitality sector.
Provide greater capability and resilience training for hospitality and support the sector to attract, train, and develop New Zealanders in hospitality.
Review issues within the alcohol licensing area creating certainty for applicants and regulators.
The brewing sector’s success depends on several interconnected industries, including agriculture, transport, food and beverage retail, and hospitality. Without a stable economic environment for these sectors to operate in, the brewing industry will suffer. The hospitality and tourism sectors are vital complementary industries for the brewing community, with sales through hospitality accounting for a significant portion of total beer sales in New Zealand.
The current economic challenges, recession and high inflation, impact the cost of input goods and decrease demand for discretionary goods like craft and premium beer. Additionally, record levels of alcohol excise increases are projected to cost the brewing sector an extra $60 million over the next year. Maintaining a stable economic operating environment offers several advantages for the brewing
industry, enabling an environment which fosters consumer confidence, enables long term planning and investment and business confidence and growth.
Supply chain security and domestic production
The New Zealand beer industry requires various input goods and extensive distribution to numerous outlets. Security of supply chains and input goods is vital for operational sustainability. Government support in transitioning to alternative energy sources, more sustainable materials for manufacture, and C02 capture for the brewing process helps the brewing and hospitality sectors. The brewing sector has faced logistical issues due to worker shortages, and BANZ supports fit-for-purpose immigration settings to address this. Domestically, brewers produce 357 million litres of beer annually, and an additional 77 million litres is imported. The production process relies heavily on locally sourced ingredients, such as homegrown grains and hops, with collaboration between brewers, growers, and producers contributing to the production of this local product. BANZ supports government to ensure appropriate regulatory settings for agricultural production of input goods through new research and development opportunities, access to workforce and low barriers to land development for these uses.
Regulatory Burden
Brewers face a range of regulatory pressures and compliance costs including but not limited to:
Annual alcohol excise increases.
Continuous changes in label requirements.
Inconsistent licencing conditions.
Local Alcohol Policies.
Sale and Supply of Alcohol Act review.
Substantial rate increases.
Alcohol licencing fees.
Customs Controlled Area licences.
Food Safety plans.
Impending changes to the NZ waste system (see packaging and sustainability).
The below focuses on just the first three factors of this list.
Annual alcohol excise increases
Government budget documents predict alcohol excise to increase by approximately $93.8m or close to 7% over the coming year. Beer constituted 32.8% of alcohol excise tax in 2021/22, which projects a yearly increase of $30.5m for beer in 2023/24. The Government has the authority to raise excise up to the level of CPI but the discretion to increase it at a lower rate also. We continue to advocate for a variable keg rate such as is the case in Australia, supporting hospitality businesses and promoting alcohol consumption in supervised environments. The proposed 2023/24 excise increase would mean $88.67 in excise per 50-litre keg of beer.
Labelling
Over the past five years, the brewing sector has undergone and is currently undergoing time-consuming and expensive changes in product and packaging label requirements. These include mandatory pregnancy warning labels, energy labelling (calorie and KJ), and reviews of claims about low carbohydrates or sugars. Each change has been made individually, leading to multiple costly label and design modifications. Research indicates that a single label change costs the industry between $859 to $7,315 per stock keeping unit (SKU), with a total estimated cost ranging from $61.2 to $521.4 million.
Inconsistent Licencing Conditions
It has become more apparent that alcohol licencing conditions are becoming more obscure, harder to define (and therefore comply with) and in some cases, of questionable legality. The imposition of conditions including restricting single serve beers, setting a minimum price, or restricting one product type over another have become increasingly prevalent. With the prohibitive cost of appeals and often the need for a business to be operational licensees are increasingly having to accept these restrictions on trade just to survive. BANZ believes that many of these conditions (including price) are best set at a higher policy level than being imposed by regulatory agencies or District Licencing Committees. BANZ suggests including this matter in any review of the Sale and Supply of Alcohol Act or preferably a more prescriptive definition of appropriate conditions to be applied to On and Off Licences within the Act.
ENVIRONMENTAL SUSTAINABILITY
The Brewers Association will work with Government to:
Develop industry led product stewardship models for packaging.
Provide best practice examples in water and carbon reduction transitioning for the wider manufacturing sectors.
Implement a fit for purpose standardised kerbside collection model.
Support the roll out of the voluntary standardised Australasian Recycling Labelling.
Sustainability is crucial to our members and consumers. Our industry uses highly recyclable packaging like glass bottles and aluminium cans, as well as circular/reusable systems like kegs and returnable swappa crate bottles. Both Brewers Association members are parties to the Climate Leaders Coalition where signatories to the Statement of Ambition must meet four minimum requirements:
Measuring emissions and reporting them publicly.
Adopting short-term gross absolute science aligned targets for scope 1 and 2 emissions to support the delivery of substantial reductions needed to limit future warming to 1.5 degrees Celsius.
Assessing climate change risks and publicly disclosing them; and
Proactively enabling employees and suppliers to reduce their emissions.
The Brewers Association and its members support the Sustainable Business Council and Climate Leaders Coalition pre-election briefing paper on “Policy priorities for accelerating climate action and building a resilient Aotearoa”.
We support the Government’s waste strategy to grow New Zealand’s circular economy, reduce waste, and minimise greenhouse gas emissions. The industry has been actively working on waste minimisation initiatives, and our customers expect us to do so. We look forward to playing a constructive role in the strategy’s development to ensure practicality and reasonable costs for consumers. In particular, we support the roll out of a nationwide standardised kerbside collection model. It is also BANZ position that this initiative needs to go further with the specific separation of mixed recycling, so glass is separated and sorted at the source to prevent contamination while being processed.
As part of the recycling process, creating an environment where consumers understand their role and the ability to recycle different materials is important and BANZ supports the uptake of the Australasian Recycling Label (ARL) by the Australian Packaging Covenant Organisation (APCO) in New Zealand.
The ARL is an on-pack labelling scheme that helps consumers to recycle correctly and supports brand owners to design packaging that is recyclable at end-of-life. More than 95% of scannable barcodes on packaging are common across both New Zealand and Australia, so our members need one labelling system.
If considered in the future, we support well-designed container collection schemes and a robust regulatory framework for product stewardship. We seek the chance to collaborate with the Government on the proposed product stewardship schemes to achieve the best possible outcome for NZ, consumers, social enterprises, and businesses. We believe that in the first instance product stewardship schemes are best to be industry-led. Our members’ experiences in Australia have shown where this is the case the outcomes for recycling and cost effectiveness are greatly improved.
BANZ MEMBER PRIORITES
DB Breweries
2030 sustainability goals, which include sourcing 100% of energy from renewable sources, achieving zero waste to landfill by 2025, and balancing 100% of the water consumed in production.
Key initiatives in the 2022 year included:
71% of sales fleet vehicles are hybrid.
49% reduction in scope 1 & 2 carbon emissions since 2018 base levels.
0% gender pay gap.
96% of expenditure in domestic (materials, contractors etc.).
Lion NZ
Toitu Certified Carbon Neutral business.
30% reduction in Scope 1 and 2 carbon emissions from a 2019 baseline.
99% of packaging is recyclable and on average has 73% recycled content.
Gender pay gap closed since 2016.
100% Of CO2 used on site in Auckland is recovered from fermentation in the brewing process to be reused in other areas of brewing and packaging.
The views expressed in this document are that of the Brewers Association of New Zealand and its members. Any further detail on these matters can be accessed by contacting Brewers Association Executive Director Dylan Firth.
P: 0276888488
E: dylan.firth@brewers.org.nz