New Zealand: Beer consumption down in the year to June 30 because of Covid-19 restrictions

Kiwis drank 125.2 million litres of beer in the year to June 30, but that was 8 million litres less than year ago as Covid-19 restriction hammer the hospitality trade, according to Stats NZ.

Richard Walshe, the general manager of The Thistle Inn, said cancellations and slow evenings had had a big impact on beer sales at the historic Wellington pub.

Business was well below what it had been at level 1, Walshe said.

“It’s a hell of a lot harder, too, with table service.”

Under level 2 bars can open but have to provide seated service. Trading across the board had dropped, but was particularly noticeable in the evenings, he said.

Events had to be postponed and a number of private functions had been cancelled.

“We don’t get the late night trade like we used to. From 7pm onwards, were not getting anyone in.”

While the wage subsidy had been helpful, the pub no longer qualified, meaning staff contracts were being amended to allow for fewer hours, Walshe said.

Brewers Association executive director Dylan Firth said the closure of bottle stores and hospitality venues during the lockdown had had a significant flow on effect on brewers, Firth said.

”I think we expected there to be a decline, but the numbers highlight how hard it has been for the hospitality sector,” Firth said.

The brewing industry expected difficulties for the sector to continue with the ongoing uncertainty and alert level restrictions, Firth said.

Firth said hospitality venues were a high value market for brewers, who make more on a pint of beer than on sales through the supermarket.

“Looking at the sector and seeing just how tough it is, and knowing there are a lot of venues that aren’t going to open again, means there are going to be fewer businesses selling product in the future.”

Firth said brewers across the spectrum had been hard hit during the Covid-19 crisis.

Businesses were looking at taking out more loans to survive, which wasn’t ideal in the long term, he said.

“We need to be smarter about this. It is disappointing that the rent relief has been blocked. That would have allowed for better dialogue between business owners and their landlords,” Firth said.

“There has been sector specific initiatives for media, for aviation, for tourism and yet the hospitality sector has been really slammed by lockdown and restrictions.”

Firth said even smaller initiatives, like removing the excise on kegs that spoiled during the lockdown, would help the brewing industry regain some momentum.

Hospitality NZ chief executive Julie White said the recent data from Stats NZ confirmed what she was hearing from the association’s members.

“What we are hearing is that operating under level 3 is equivalent to a full lockdown. Last week, there was a 36 per cent drop in food and beverage earnings on the previous week.”

The move back into level 3 for Auckland was, in some ways, worse than the first time around as the industry didn’t expect a sugar rush once restrictions lifted, White said.

The association was attempting to illustrate that many other industries rely on the hospitality industry including agriculture, horticulture, and the brewers, White said.

But without significant relief from the Government, business owners were being forced to make hard decisions around staff and whether they could trade out of their current financial difficulties, she said.

There was a significant risk that experienced staff would be lost and unavailable to work once the industry did pick up again, White said.

A spokeswoman for Lion Breweries said there had been a significant drop in the amount of beer purchased in the first half of the year.

It was mainly driven by the “massive decline” in the hospitality sector.

“As a company we have been doing everything we can to support our hospitality customers but there is no doubt that they will need ongoing targeted support to survive,” she said.

Online sales had increased but had not made up for the overall decline in the sector, she said.

Workers advocate Chloe Anne King said hospitality workers were contacting her in tears as they tried to navigate the uncertainty of the industry at the moment.

“These are people who have been in the industry for 15 years and don’t know if they will have a job next week,” King said.

As hospitality businesses face difficulty, workers have faced increased illegal redundancy processes and wage theft, King said.

“I have workers who have told me that their employers are not paying them over the two-week lockdown,” she said.

“It’s pretty devastating.”

Any assistance package needed to ensure workers get assistance as well as the businesses, she said.

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