1 00:00:00,760 --> 00:00:05,480 Speaker 1: Where business meets insight of a business hour with Ryan 2 00:00:05,600 --> 00:00:09,600 Speaker 1: rich on News Talks MB. Good evening, it is six 3 00:00:09,680 --> 00:00:12,560 Speaker 1: after six. Great to have your company tonight. Jason Walls 4 00:00:12,600 --> 00:00:15,720 Speaker 1: raps the political week for us shortly. We're in Hong 5 00:00:15,800 --> 00:00:19,040 Speaker 1: Kong with the Asia Business Report, and our UK correspondent 6 00:00:19,040 --> 00:00:21,759 Speaker 1: Gail Downey joins us before top of the hour. Right 7 00:00:21,800 --> 00:00:24,200 Speaker 1: now if you might be sitting down actually to enjoy 8 00:00:24,280 --> 00:00:27,040 Speaker 1: a cold brew yourself, So this is great timing. A 9 00:00:27,080 --> 00:00:30,440 Speaker 1: new report has found that beer makes up almost one 10 00:00:30,480 --> 00:00:34,920 Speaker 1: percent of our country's GDP. Brewing accounted for three point 11 00:00:35,080 --> 00:00:38,960 Speaker 1: six billion dollars of our GDP last year. One point 12 00:00:39,080 --> 00:00:42,479 Speaker 1: three percent of the national workforce is employed in the 13 00:00:42,479 --> 00:00:48,360 Speaker 1: brewing industry, but alcohol excise duties often outpace inflation, and 14 00:00:48,400 --> 00:00:50,960 Speaker 1: this is having an effect on the industry. Josh Ruffle 15 00:00:51,159 --> 00:00:54,279 Speaker 1: is the co owner of award winning Brewery Garage Project, 16 00:00:54,680 --> 00:00:55,920 Speaker 1: and he's with me now, Joss. 17 00:00:55,920 --> 00:00:57,800 Speaker 2: Good evening, Good evening. 18 00:00:59,280 --> 00:01:01,760 Speaker 1: First of all, can gratulations you're holding up one percent 19 00:01:01,800 --> 00:01:02,520 Speaker 1: of the economy. 20 00:01:04,200 --> 00:01:07,200 Speaker 2: Thanks. I don't know if we can take full responsibilities 21 00:01:07,240 --> 00:01:10,280 Speaker 2: before that, but it is great to see you know 22 00:01:10,760 --> 00:01:13,480 Speaker 2: that brewing is making such a positive impact across New 23 00:01:13,520 --> 00:01:15,120 Speaker 2: Zealand and throughout the economy. 24 00:01:15,560 --> 00:01:17,200 Speaker 1: Is it quite labor intensive? 25 00:01:19,000 --> 00:01:23,040 Speaker 2: You know, with the smaller independent breweries, they are very 26 00:01:23,319 --> 00:01:26,320 Speaker 2: very labor intensive, so you typically see high levels of 27 00:01:26,360 --> 00:01:30,039 Speaker 2: employment in those breweries. And then as the breweries get larger, 28 00:01:30,200 --> 00:01:34,320 Speaker 2: it becomes more automated and you start to see fewer 29 00:01:34,360 --> 00:01:38,280 Speaker 2: employees per per sort of hector letter per liter produced. 30 00:01:38,720 --> 00:01:41,360 Speaker 2: But you know, there are very large brewing companies in 31 00:01:41,400 --> 00:01:44,119 Speaker 2: the country and they do employee significant in other people 32 00:01:44,160 --> 00:01:44,560 Speaker 2: as well. 33 00:01:44,760 --> 00:01:48,960 Speaker 1: Where do you set garage project in terms of small big. 34 00:01:50,400 --> 00:01:54,120 Speaker 2: We are one of the larger independent breweries in the country, 35 00:01:55,200 --> 00:02:00,440 Speaker 2: so you know, we're now starting to go little toe 36 00:02:00,480 --> 00:02:03,200 Speaker 2: to toe with the bigger breweries, especially in certain areas 37 00:02:03,240 --> 00:02:06,880 Speaker 2: like non alcoholic beers. Our tiny non elk beer is 38 00:02:06,920 --> 00:02:09,760 Speaker 2: the number three non elk beer in the country, behind 39 00:02:09,840 --> 00:02:13,640 Speaker 2: Heineken and Perni, which is really exciting, really pleasing to see. 40 00:02:13,960 --> 00:02:16,160 Speaker 2: But in the scheme of things, we are tiny. You know, 41 00:02:16,240 --> 00:02:19,679 Speaker 2: we are really small compared to sort of the multinational 42 00:02:19,720 --> 00:02:23,040 Speaker 2: breweries still and that goes for craft generally across the board. 43 00:02:23,200 --> 00:02:24,800 Speaker 1: How do they feel about you taking them on? 44 00:02:26,960 --> 00:02:29,600 Speaker 2: I'm sure that I'm sure that we weren't there, But 45 00:02:29,800 --> 00:02:33,040 Speaker 2: you know, I think you know, it's when you start 46 00:02:33,080 --> 00:02:36,600 Speaker 2: to get into into that share of market, we start 47 00:02:36,600 --> 00:02:41,720 Speaker 2: to become meaningful that they're probably definitely sitting up and 48 00:02:41,760 --> 00:02:44,800 Speaker 2: paying notice. And that's what you're seeing with the consolidation 49 00:02:44,960 --> 00:02:48,480 Speaker 2: over the last several years of smaller breweries getting purchased 50 00:02:48,480 --> 00:02:49,400 Speaker 2: by the larger breweries. 51 00:02:49,760 --> 00:02:53,600 Speaker 1: Are you understanding of the alcohol excise tax increases that 52 00:02:53,639 --> 00:02:56,760 Speaker 1: we've been seeing, I mean they how much? How much 53 00:02:56,800 --> 00:02:59,320 Speaker 1: of what we consume. You know, if we get a 54 00:02:59,360 --> 00:03:02,560 Speaker 1: dozen beer or whatever is excise is tax. 55 00:03:04,240 --> 00:03:08,720 Speaker 2: It's a huge portion. So our single largest ingredient cost 56 00:03:09,240 --> 00:03:13,880 Speaker 2: each month is excise tax to the government. It's tax 57 00:03:14,000 --> 00:03:17,239 Speaker 2: on a per later basis. So you know, a three 58 00:03:17,240 --> 00:03:20,600 Speaker 2: percent beer versus a six percent beer is double the tax. 59 00:03:21,200 --> 00:03:23,119 Speaker 2: And when you start to look at say a five 60 00:03:23,160 --> 00:03:26,840 Speaker 2: percent beer in a keg, you're almost getting to half 61 00:03:26,880 --> 00:03:31,239 Speaker 2: the cost of that keg comprising of excise alcohol tax 62 00:03:31,320 --> 00:03:34,560 Speaker 2: and GST by the time it hits the publican or 63 00:03:34,639 --> 00:03:36,080 Speaker 2: the hospitality. 64 00:03:35,520 --> 00:03:40,160 Speaker 1: Venue, which is very very significant. How does that compare 65 00:03:40,160 --> 00:03:40,880 Speaker 1: to overseas? 66 00:03:42,200 --> 00:03:45,480 Speaker 2: I think the biggest difference we see overseas. I mean, firstly, 67 00:03:45,600 --> 00:03:49,400 Speaker 2: other countries do tax alcohol in different ways. In America, 68 00:03:49,480 --> 00:03:53,440 Speaker 2: it's taxed on the package, so a keg of beer 69 00:03:53,520 --> 00:03:57,640 Speaker 2: has a flat tax irrespective of the alcohol content. In 70 00:03:57,720 --> 00:04:02,040 Speaker 2: the UK we see a tax scaling depending on the 71 00:04:02,080 --> 00:04:05,840 Speaker 2: size of the brewery. So the government here recognizes that 72 00:04:06,160 --> 00:04:11,360 Speaker 2: smaller breweries should be taxed at lower levels than the large, multinational, 73 00:04:11,520 --> 00:04:15,000 Speaker 2: multi billion dollar breweries. In New Zealand we have a 74 00:04:15,000 --> 00:04:18,200 Speaker 2: flat per leader of alcohol tax irrespective of the size 75 00:04:18,200 --> 00:04:20,560 Speaker 2: of your brewery. 76 00:04:20,680 --> 00:04:22,520 Speaker 1: I mean, obviously this is a cost that you would 77 00:04:22,720 --> 00:04:26,120 Speaker 1: want to do without. But alcohol does come with social harm. 78 00:04:26,160 --> 00:04:27,960 Speaker 1: We all know this because we've seen it happen on 79 00:04:28,040 --> 00:04:32,239 Speaker 1: Courtney Place or wherever. What are you Is this something 80 00:04:32,279 --> 00:04:35,440 Speaker 1: you want changed or are you just saying, look, this 81 00:04:35,520 --> 00:04:37,800 Speaker 1: is a reality of doing business in New Zealand. 82 00:04:38,760 --> 00:04:42,440 Speaker 2: Now we're perfectly happy with having alcohol tax. We think 83 00:04:42,480 --> 00:04:46,760 Speaker 2: that's appropriate. I think what hasn't been supportive of the 84 00:04:46,760 --> 00:04:50,000 Speaker 2: industry in the last few years across both governments is 85 00:04:50,240 --> 00:04:55,640 Speaker 2: we've had excise Excite has been pegs to CPI, Inflation 86 00:04:55,760 --> 00:04:59,039 Speaker 2: has gone through the roof, and we're one of the 87 00:04:59,040 --> 00:05:01,960 Speaker 2: few countries in the world that carried on tax increasing 88 00:05:02,000 --> 00:05:05,760 Speaker 2: their excise tax peace to that inflation. So you know, 89 00:05:05,800 --> 00:05:09,200 Speaker 2: we've had almost twenty percent excise increase in the last 90 00:05:09,200 --> 00:05:13,120 Speaker 2: three years, so excise is now significantly out of step 91 00:05:13,200 --> 00:05:15,000 Speaker 2: of what it would be if we looked at sort 92 00:05:15,000 --> 00:05:17,320 Speaker 2: of a one and a half percent average increase, which 93 00:05:17,360 --> 00:05:20,200 Speaker 2: we had from about twenty sixteen to twenty twenty one. 94 00:05:21,040 --> 00:05:24,279 Speaker 2: You know, we're probably paying twenty thirty levels of tax 95 00:05:24,480 --> 00:05:27,960 Speaker 2: as a country, as a drinker, as a producer, and 96 00:05:28,000 --> 00:05:30,400 Speaker 2: I think the industry is probably just asking government to 97 00:05:30,520 --> 00:05:33,160 Speaker 2: hate rein it back to what it should be in 98 00:05:33,320 --> 00:05:37,279 Speaker 2: twenty twenty five. It's tax at twenty twenty five levels. 99 00:05:37,800 --> 00:05:40,359 Speaker 1: Yeah. Interesting, Why do you guys always run out of 100 00:05:40,360 --> 00:05:42,360 Speaker 1: your low card beers? Do this a personal question? 101 00:05:44,520 --> 00:05:47,000 Speaker 2: I think it's you know, they're doing a big shift 102 00:05:47,920 --> 00:05:49,880 Speaker 2: in the last few years and none olt beers and 103 00:05:49,960 --> 00:05:53,200 Speaker 2: low car beers. And you know that's I guess part 104 00:05:53,200 --> 00:05:55,560 Speaker 2: of a wider trend of everyone. We're a bit more 105 00:05:55,600 --> 00:05:57,440 Speaker 2: to think things that are a little bit more health 106 00:05:57,440 --> 00:05:58,800 Speaker 2: conscious and better for you. 107 00:05:59,120 --> 00:06:02,200 Speaker 1: Are you scaling up? Is it quite hard to do 108 00:06:02,240 --> 00:06:05,160 Speaker 1: the low carb option? And are you trying a companies 109 00:06:05,200 --> 00:06:06,720 Speaker 1: like you're trying to scale up so that you can 110 00:06:06,760 --> 00:06:07,160 Speaker 1: do more? 111 00:06:08,760 --> 00:06:11,600 Speaker 2: You know, I think it's it's easy to put out 112 00:06:11,600 --> 00:06:14,600 Speaker 2: a low car beer, it's exceptionally challenging to make one. 113 00:06:14,640 --> 00:06:18,440 Speaker 2: It tastes delicious, you know, to have a beer that 114 00:06:18,640 --> 00:06:21,240 Speaker 2: you know how good Shout is ninety nine point nine 115 00:06:21,520 --> 00:06:25,080 Speaker 2: percent car free, and then to actually have some flavor 116 00:06:25,120 --> 00:06:28,160 Speaker 2: and taste in aroma that took a long time to 117 00:06:28,520 --> 00:06:29,000 Speaker 2: get right. 118 00:06:30,400 --> 00:06:32,560 Speaker 1: Well, you've certainly got it right. I just need more 119 00:06:32,560 --> 00:06:34,800 Speaker 1: of it. Thank you. Josh. Great to have you on 120 00:06:34,839 --> 00:06:37,760 Speaker 1: the show. Just ruffle with us. He's the co owner 121 00:06:37,800 --> 00:06:40,359 Speaker 1: of Garage Project, talking about some of the challenges for 122 00:06:40,400 --> 00:06:44,080 Speaker 1: them in New Zealand, but also I guess huge opportunity, 123 00:06:44,200 --> 00:06:47,960 Speaker 1: particularly you've got people like me consuming so much of it. 124 00:06:48,760 --> 00:06:51,920 Speaker 1: For more from Heather Duplessy Allen Drive, listen live to 125 00:06:52,040 --> 00:06:55,080 Speaker 1: news Talks. It'd be from four pm weekdays, or follow 126 00:06:55,120 --> 00:06:56,880 Speaker 1: the podcast on iHeartRadio.