industry insights
Normal Kiwi social occasions A Bill in the Members’ ballot proposes to stop the “normalisation and glamourisation” of alcohol and reduce alcohol-related harm by banning sports advertising and sponsorship. As an industry, we 100% support reducing the misuse of alcohol and harm. However, advertising and sponsorship are already well-regulated by the Sale and Supply of Alcohol Act and the Code for Advertising and Promotion of Alcohol. Industry supporters of local clubs and international teams operate to high social responsibility standards, and we support consequences for breaches. Government statistics show most Kiwis are responsible drinkers and consume 25% less alcohol than in the ’70s. So, is ‘normal’ problematic? What are Kiwis’ thoughts on advertising and sponsorship? Would the Bill reduce harm? Four out of five (78%) agreed with the statement: “I am comfortable with beer, wine and spirits being part of our normal Kiwi social occasions”, 12% disagreed, and 8% couldn’t decide. Even 78% of non-drinkers agreed. Our drinking culture is evolving and establishing new norms toward moderation and a balanced lifestyle. It’s okay to choose a no-alcohol beer, enjoy your low-alcohol wine or sip and savour a full-strength spirit. It’s about socialising and connecting with friends and family over food and a drink – it’s the sociability, not the alcohol, that is the reason for getting together. It’s likely why around two-thirds (65%) of Kiwis feel comfortable not drinking alcohol on a night out. Advertising spending by the industry has increased over the past few years, yet alcohol consumption has decreased
Bridget MacDonald Executive Director, New Zealand Alcohol Beverages Council
steadily. Sponsorship and advertising are not about encouraging people to drink more, nor promoting heavy drinking – it’s about promoting one brand over another. There’s no clear evidence that sports sponsorship leads to harmful drinking, while evidence is clear the major influences on drinking behaviour of young people are peer-group norms and parental drinking behaviour. Would banning sponsorship make a difference? Are Kiwis concerned about alcohol advertising? Well, more than half (53%) of Kiwis think the level of industry sponsorship of sport is about right or could be more (33% say it’s too much), and more than half (58%) say advertising levels are acceptable or could be more (35% say it’s too high). The pathway to reducing alcohol-related harm isn’t achieved by banning advertising or sponsorship; it’s by taking a pragmatic approach through targeted education and support. We can also normalise moderation and empower people to make better drinking decisions based on their personal situation and lifestyle.
A tin for the tax collector Every year on the first of July, brewers across New Zealand are required to pay higher excise tax. Some years it’s relatively small, others it can be tough to swallow. In 2022, it looks to be the biggest increase in alcohol excise tax for over 30 years. For a refresher on how this works: every year the level of increase in alcohol excise tax is determined by a calculation which is close to the March Consumer Price Index, aka inflation. The new rate then comes into effect on 1 July. Inflation figures for the December quarter were 5.9%. At the time of writing, the projected inflation figure for the March quarter is approximately 6-6.5%. Based on last year’s total of $1.2b, a 6% level would see an increase in excise tax of an estimated $72m. That’s an exceptional amount of money for an industry that has been dealing with a difficult two years and faces a raft of other cost pressures through materials, transport, rents etc. For beer, this means $24.6m is added to the cost of production nationwide. Like anything, the cost of production is reflected in the sale point at some point, only so much increase can be absorbed. So, if brewers decided to pass on this increase, it would bring the new rate of excise tax on a
8 THE SHOUT NZ – MAY 2022
Dylan Firth Executive Director, Brewers Association of New Zealand
5% ABV beer at 330 ml to $0.54 per bottle. Or for a 425ml (NZ pint) tap beer at 5% ABV to $0.70; or for a 50L keg of 5% ABV beer $82.35 would be excise tax. At current dozen prices, that means one out of four beers paid for is for the taxman. In 2021, the Brewers Association requested the government look at innovative way to reduce some of the overall cost burden on brewing and hospitality businesses through a targeted 50% excise tax reduction on kegs. At the time there was little interest in this. However, with rates of inflation at record levels we think it is time for some further reflection by the government on this request. Wouldn’t you?