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New tax tough to beer

As the government introduces the second-largest beer tax increase in 30 years, a Martinborough-based industry expert discusses potential impacts on the industry.

The annually adjusted alcohol excise rate has been confirmed to increase by 6.65 per cent this year, after a 6.9 per cent increase last year.

With revenue from alcohol excise taxes expected to be almost $1.3 billion in the 2022/23 financial year, government numbers show the new tax hike could cost Kiwis an extra $86 million a year. Almost $30m a year of this is expected to be paid by beer drinkers.

Martinborough resident Dylan Firth is the executive director of the Brewers Association of New Zealand.

He said the rise represents a significant shift in excise tax that will be noticeable for local breweries.

While breweries with a cellar door, like Martinborough Brewery, do not have the same transport and distribution costs as other brewers, he expects the tax hike to hit everyone.

“Costs might go up for consumers, depending on individual business decisions,” Firth said.

Breweries have also recently been affected by other costs going up – including a 1000 per cent rise in the price of carbon dioxide.

Firth said brewing supports many other businesses – such as hospitality – that will also be looking at cost increases.

“There is such a big hospitality scene in Martinborough and Wairarapa; it will definitely have an impact,” he said.

On Monday, Firth issued a joint statement with Melanie Kees, executive director of the Brewers Guild of New Zealand.

“The beer excise increase could not come at a worse time for brewers and consumers. With Kiwis facing a cost-of-living crisis, more tax is the last thing anyone needs,” they said.

“What that means is that when you next buy a 12-pack of beer, 50 per cent of the price will be made up of tax through excise and GST.

“Combined with the many other increasing costs brewers and beer sellers in the hospitality sector are facing, the price of a pint is fast becoming out of reach. The last thing we want to do with our borders re-opening and tourism building up again, is to be seen as the land of the unaffordable pint.”

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