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Speaker 1: You're listening to a podcast from news Talk zed Be

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Speaker 1: follow this and our wide range of podcasts now on iHeartRadio.

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Speaker 2: Steep Drop and how we Consume Alcohol has reignited conversations

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Speaker 2: around Texas on alcohol stats and z shows the volume

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Speaker 2: of all alcohol alcoholic rather beverages found eight point three

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Speaker 2: percent and twenty twenty five bear had a sharp drop

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Speaker 2: at ten percent. Joining us now is Sam McKinnon. He

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Speaker 2: is with Hospitality in New Zealand. Sam, thank you very

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Speaker 2: much for your time this afternoon.

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Speaker 3: Hey Sam, how much does comparatively high excise tax affest

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Speaker 3: effect hospo businesses in New Zealand?

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Speaker 4: Yeah, well, I mean, as you've already touched on, you know,

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Speaker 4: the excise collection rate has stayed the same at about

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Speaker 4: one point three billion, but that excise tex has risen

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Speaker 4: twenty percent in the last five years. So given that

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Speaker 4: that volume of consumption has dropped but excise text has

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Speaker 4: gone up, you know, I guess that increases being covered

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Speaker 4: by the businesses that produce them sell beer and so

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Speaker 4: that's ultimately being born by the customer or at least

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Speaker 4: those who are still enjoying alcohol. So, you know, if

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Speaker 4: we if we're looking at the amount of XR is

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Speaker 4: on a cake that's at about thirty percent. Now it's

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Speaker 4: for forty five percent if you're including just so forty

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Speaker 4: five percent of your cake is our tax and that's

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Speaker 4: a significant cost that I guess our operator is our

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Speaker 4: bars and bars and pubs are managing and having to

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Speaker 4: figure out how they make some money on top of it.

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Speaker 3: Is this the main reason people are drinking less? Do

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Speaker 3: you think the cost?

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Speaker 4: I think, I mean there's this is significant health trends

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Speaker 4: that are kind of driving people away from consuming as

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Speaker 4: much alcohol or you know, the zero The growth of

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Speaker 4: the zero percent sector has been massive in the last

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Speaker 4: couple of years. But yeah, certainly costs is becoming an

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Speaker 4: increasing driver for people to choose to consume less. So

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Speaker 4: it's a bit of a combination effect.

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Speaker 3: What good does hospo do do for the country? Well,

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Speaker 3: I mean we say that because XI tax is effectively

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Speaker 3: a syntax, so you know, to offset the idea that

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Speaker 3: people text through and say that they're they're the you know,

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Speaker 3: the damage that alcohol does. So I just want to

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Speaker 3: balance that with what good the good the hospital does

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Speaker 3: for the country.

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Speaker 4: Yeah, yeah, I mean at an economic level, we're obviously

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Speaker 4: well spread across the country. So there's regional jobs and

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Speaker 4: employment that's being generated generate significant cash flow through the economy.

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Speaker 4: But from a community standpoint, we are a significant third

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Speaker 4: space for people together. And not everyone's comfortable hosting people

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Speaker 4: in their homes, but they still want to have social

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Speaker 4: environments and so you know, we are a significant player

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Speaker 4: in that space in terms of providing areas for people

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Speaker 4: to gather and enjoy time together. And so I guess

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Speaker 4: there's there's the social benefits that we see hospitality bringing

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Speaker 4: to New Zealand, and they are benefits, it's not just

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Speaker 4: the downsides that people like to point out.

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Speaker 2: So why is it so hard seeming to get traction

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Speaker 2: on something like removing ex size for hospitality. There's politicians

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Speaker 2: on on you know, every sou of the aisle who

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Speaker 2: come out strongly in support of hostpo and say that

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Speaker 2: we need to do something to keep it propped up

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Speaker 2: because it's so valuable for society. But this idea, it's

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Speaker 2: been floated around for some time and nobody's really trying

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Speaker 2: to progress it at the political level.

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Speaker 4: Yeah, I mean, I think you know, alcohol is seen

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Speaker 4: as a contentious political issue. You know, every MP will

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Speaker 4: have a constituent who support hospitality but have some concerns

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Speaker 4: around the role of alcohol in their community. And I

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Speaker 4: guess from our perspective, you know, hospitality plays a key

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Speaker 4: role in managing alcohol related harm because we're the safest

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Speaker 4: place to consume. If you're going to have a drink,

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Speaker 4: have it on premise. But I think the other sort

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Speaker 4: of challenge that we've got around XIS specifically is that

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Speaker 4: it isn't differentiated for kegs, so it's just the same

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Speaker 4: rate whatever vessel you buy your alcohol in, whereas Australia

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Speaker 4: does have a differentiated rate, so they're able to show

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Speaker 4: that they're able to reduce the price of XS on

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Speaker 4: kegs specifically, which is a direct link to obviously hospitality

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Speaker 4: and a shoup support for the sector. Because we don't

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Speaker 4: have that mechanism, it's not as easy. There's a bit

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Speaker 4: more of a process to get there. But certainly the

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Speaker 4: general political discussion as supportive of the sector, but a

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Speaker 4: little bit I guess more cautious around anything to do

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Speaker 4: with alcohol.

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Speaker 3: Now. A lot of people are texting and saying, look,

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Speaker 3: if there was less XIS tax, then HOSPO would not

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Speaker 3: lower their prices. That this isn't that they're just charged

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Speaker 3: through the charge to the roof anyway, is that true?

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Speaker 3: Do you think that? Do you think that a hospo

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Speaker 3: if there was some kind of freeze on xcise tax

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Speaker 3: or you know my suggestion I'll give you later, that

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Speaker 3: we get rid of it all on excised tax completely

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Speaker 3: in hospo situations. But would that be handed onto the customer?

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Speaker 4: Well, I mean for starters charging through the roof, as

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Speaker 4: you know, as a little bit too black and white

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Speaker 4: in terms of you know, what goes into running a

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Speaker 4: hospitality venue, and I guess the cost pressures at play

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Speaker 4: for a venue to be able to sell you a pint.

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Speaker 4: You're not just paying for the product itself that you're

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Speaker 4: also paying helping pay for the leaf, You're paying for

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Speaker 4: the staff, if you pay for the electricity costs, all

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Speaker 4: things that we know have gone through the roof over

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Speaker 4: the last last little while, and so and the same

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Speaker 4: would go for any of the household products that we

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Speaker 4: all know what sort of cost of living pressure has

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Speaker 4: put on households across his end. So yeah, I mean, look,

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Speaker 4: there will be a number of businesses that will want

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Speaker 4: to make sure that they're able to build some margin

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Speaker 4: back into the product, and so you know, it's not

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Speaker 4: to say that there's a direct link to lowering the

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Speaker 4: costs of a pint specifically, but it does mean that

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Speaker 4: the prices mon't go up as consistently, and certainly from

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Speaker 4: our perspective, helps our venues to operate more sustainably.

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Speaker 2: What to hospitality businesses broadly make more money off? Is

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Speaker 2: it booze or food? I've heard they said that food

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Speaker 2: can almost be seen as a bit of a loss

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Speaker 2: leader to get people in to have, you know, some

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Speaker 2: more glasses of wine.

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Speaker 4: Is there any truth that, Yeah, I think traditionally alcohol

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Speaker 4: has been that has been the significant sort of where

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Speaker 4: your margin is at play, but that's increasingly being impacted

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Speaker 4: by things like the increase in excise in the last

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Speaker 4: couple of years. So the treat is that across your

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Speaker 4: entire business, all of your margins it's in because there

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Speaker 4: is a ceiling of what the customer is willing to pay,

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Speaker 4: and we're obviously trying to find that balance between covering

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Speaker 4: costs and making sure that you know, the prices are

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Speaker 4: still palatable for the customer. So you know, in that sense,

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Speaker 4: I guess there might be marginally making more compared to

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Speaker 4: your food products, but it doesn't mean that you're making

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Speaker 4: money hand over this for sure.

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Speaker 3: So is there anyone at all pushing this idea that

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Speaker 3: I came up with today that we remove excise tax

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Speaker 3: on alcohol sold within restaurants and bars. Keep going hard

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Speaker 3: on it, even increase it for bottle stores and supermarkets,

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Speaker 3: but get rid of it completely in hosposon being that

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Speaker 3: hospital employs people build things, and there's a huge onus

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Speaker 3: on restaurants and bars to look after their patrons. Is

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Speaker 3: there anyone at all that's pushing this idea?

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Speaker 4: I mean from from a hospitality in New Zealand's perspective,

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Speaker 4: we're campaigning for a reduction of excise tax on kegs,

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Speaker 4: but given that you can specifically ring fence around on

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Speaker 4: premise hospitality venue consumption, so you know it's a direct

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Speaker 4: lever that links to the sector. We're not we're not

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Speaker 4: pushing for a removal altogether. Certainly, if for politicians came

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Speaker 4: to pick that one up, would be happy to support that.

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Speaker 4: But I guess where we're sort of landed in somewhere

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Speaker 4: that we think as a practical, a practical solution that

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Speaker 4: that kind of can can keep as many people happy

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Speaker 4: and that in that realm as we can.

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Speaker 3: Well, I'm starting the campaign here, Sam, so yeah, I'll

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Speaker 3: tell you. Oh could you updated with how I go?

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Speaker 4: Yep, he's taken up the mentor for you.

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Speaker 3: I've got almost no power unfortunately, Sam.

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Speaker 4: Great to check appreciate.

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Speaker 2: Yeah, good on you, Sam, good to chat with you.

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Speaker 2: Thank you very much for joining us. That is Sam McKinnon,

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Speaker 2: Hospitality New Zealand Communications Managers.

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Speaker 1: For more from News Talks, ed B listen live on

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