Brewers and hospo call for 50% cut to draught beer excise
Hospitality New Zealand, the Brewers Guild of New Zealand, and the Brewers Association, are urging the Government to introduce a 50% reduction in excise tax on draught beer sold for on-premise consumption.
The organisations say this targeted change would lower a major input cost, improve the viability of businesses and support the regional communities that rely on pubs, bars, and taprooms for jobs, connection, and local economic activity.
Over the past ten years, the market share of on-premises sales, and therefore that of draught beer, has collapsed from around 40% to about 15%, as New Zealanders have steadily shifted toward drinking at home.
Because current settings treat packaged and draught beer the same, the industry groups say a reduction in excise tax on draught beer is a common-sense approach to rebalancing the market share of on-premise environments.
Hospitality NZ Chief Executive, Kristy Phillips says: “More than 160,000 New Zealanders work in hospitality, many in regional areas. This is about keeping beer in supervised community spaces and keeping both hospitality venues and breweries not just surviving but thriving.
“With a modest, targeted change, we can lift regional economies, protect jobs, and sustain industries like brewing and hospitality without compromising public health goals.”
Executive Director of the Brewers Guild of New Zealand, Melanie Kees, says: “Breweries, especially our small and regional operators, are already under pressure from rising production and compliance costs, and current excise settings increase that burden.
“Reducing excise on beer served from kegs would not only support their ability to do business but also strengthen the entire value chain while protecting the community infrastructure and social spaces that pubs, bars, and taprooms provide.”
The industry groups point out that the UK and Australia already apply a differentiated and reduced tax rate on draught rates to back their hospitality sectors. They say aligning with these models would recognise the higher economic and social value created by on-premise consumption.
It’s believed this potential change will have a fiscally low impact on government revenue because keg beer represents a comparatively low volume of sales, so the excise reduction will only apply to a small proportion of beer sold, and because it’s anticipated that greater on-premise activity will result in an increased GST take.
