DB managing director Peter Simons. Photo / Dean Prucell
DB managing director Peter Simons. Photo / Dean Prucell
Kiwis should brace to pay more for beer and other alcoholic beverages by the end of summer.
That's the word from DB Breweries, which is putting the bad news down to "unprecedented" rising costs and excise taxes.
The brewing company says costs are rising right across its supply chain, fromraw materials, to packaging, to logistics. These range from low to high double digit increases, including in well publicised cases such as sea freight, electricity and aluminium.
Asked how much extra consumers should be prepared to pay, a DB spokeswoman couldn't be specific but said prices would rise by "a dollar to a few dollars", depending on the product or pack size.
"And, of course, how much of the price increase retailers choose to pass on."
DB Brewers managing director Peter Simons said the industry was facing significant price pressure affecting most of the businesses across New Zealand.
"Over the past 18 months or so, we have absorbed as much of the rising costs as we can but we simply cannot continue to do this so will need to lift our prices this summer. We are experiencing extraordinary price pressure across our full value chain and there are challenges even securing supply in some cases. Covid has also meant our channels are operating differently, particularly in Auckland.
"Given our retailers and hospitality friends are also impacted by rising costs and Covid challenges, we expect the price change will be seen by consumers during summer."
Adding to the strain, Simons said excise on alcohol rose at a record level in mid-2021 and is expected to continue to rise in mid-2022 in line with inflation.
"The current projected price increases do not factor in any excise rise we could see in 2022. We continue to advocate for targeted relief in the form of measures such as a freeze or reduction in excise to provide meaningful support to the industry, similar to what has just been announced in the UK Budget and what we saw in Australia with the targeted relief earlier in the year in the midst of ongoing Covid challenges."
DB Breweries is one of the countries oldest beverage manufacturers and is now a subsidiary of The Heineken Company.
The company brews and distributes brands like Heineken, Tui, Export, Odd Company, Monteith's Tuatara amongst others.
Simons said the company sourced 90 per cent of its raw material and packaging materials locally which has helped mitigate the price rising to an extent but rampant rise on sea freight charges had put extra pressure, input cost even within New Zealand had skyrocketed.
Brewers Association of New Zealand executive director Dylan Firth. Photo / Supplied
Brewers Association of New Zealand executive director Dylan Firth said external drivers were putting price pressure across the industry and as a result consumers would see price increases next year.
Firth said double-digit increases in packaging materials such as aluminium and higher overheads such as wages combined with a decline in consumer spending through hospitality venues was making it very difficult for producers.
"Aluminium prices have doubled in last year alone," he said.
Prices for doing business have increased everywhere, all raw materials have increased, including water rates, the electricity prices have gone up significantly.
"Not to mention the potential excise that is forecast to increase next year," he said.
