Covid 19 coronavirus: DB Breweries launches $1 million financial support package for hospitality

DB is offering refunds for untapped kegs for struggling outlets holding excess stock. Photo / Getty Images

Brewing giant DB Breweries says it will inject $1 million into the country's hospitality industry ravaged by Covid-19 and the closure of venues.

The Auckland-based brewer has launched a support package to help bars and other hospitality venues get back on their feet once bars and night clubs are permitted to re-open from Thursday under the latest Government rules.

Dubbed 'Back Your Bar', DB Breweries has created a free online platform for operators to access advice and practical support on how to operate in the Covid-19 climate, along with arranging stock bundles worth $2m for its customers and a marketing campaign to encourage Kiwis to get out and spending again.

The online portal will provide operators with access to information on how to prepare a venue for patrons in line health and safety requirements, information on mental health and wellbeing and legal materials. DB Breweries has partnered up with law firm Dentons Kensington Swan to support businesses with legal matters arising from the lockdown and Covid-19.

DB Breweries sales director Paul Millward said the million-dollar investment acknowledged that operating at Alert level 2 and in the months ahead would not be easy.

He said the company would be arranging stock bundles worth almost $2m to it customers as a way of injecting cash into businesses pockets and protecting its own interests. While retail sales make up the largest portion of sales for DB, on-premise sales remain significant.

Traditionally, the country's two largest brewers have had exclusive supply arrangements with their customers in exchange for interest-free loans, for example, to fund the fit-out of a bar.

Millward would not comment on the status of these arrangements or what the company would do if its customers were unable to make repayments.

"Our principle on this has been we're a good-sized company that's been here for a long time and we know we're going to be here in 50 or 100 years; if we can't help a good chunk of our customers immediately then a lot of them won't be here in six months - it really is a shocking reality so we have to support them now to help them literally keep their doors open," Millward told the Herald.

An estimated 1000 hospitality groups would access the stock bundles, and the support for the wider industry would continue over "at least" the next three to four months, he said.

DB Breweries itself has been affected by the closure of liquor stores and hospitality venues.

Millward said DB Breweries had lost more than 50 per cent of its traditional revenue throughout lockdown.

On-premise operators had been struggling for four months, even before the Covid-19 crisis forced the closure of venues. "They've had not just the 7-8 weeks of lockdown but two months before because there was a lack of confidence for people to go into outlets and tourism started to slow down," he said.

Paul Millward, sales director at DB Breweries. Photo / Supplied

"If people aren't confident and don't get back out there and start spending money with our hospitality operators then this is going to last for quite some time and it won't bounce back to what it was."

On-premise was a tough industry with high lease costs and high people costs.

One in every three bars (equivalent to 50,000 jobs) could shut in the short term if patrons did not resume spending, he said.

"Back Your Bars is about us trying to stay close to our customers at the moment, if we can help our customers through this then that does helps us as well.

"[On-premise] is a really important channel and we need this channel to be healthy."

Hospitality NZ chief executive Julie White said the support programme would be some help to the hospitality industry which, along with tourism, was one of the hardest hit as a result of the pandemic.

"The Back Your Bar initiative is a fantastic package to support the industry, ultimately helping to protect livelihoods and keep this beloved part of our social fabric operating. Seeing businesses opening their doors and getting back on their feet is encouraging, and this will be a boost to many businesses who have been struggling," White said.

DB, which produces beer brands Heineken, DB Export, Kingfisher and Monteith's, among others, is offering refunds for untapped kegs for outlets holding excess stock.