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Hospitality and brewing groups are calling on the Government to introduce a 50 per cent reduction in excise tax on draught beer, arguing the move would support hospitality businesses and regional economies.
Hospitality New Zealand, the Brewers Guild of New Zealand and the Brewers Association say a targeted reduction for on-premise consumption would help improve business viability and encourage more people back into licensed venues.
Hospitality NZ chief executive Kristy Phillips says pubs and bars play a key role in the visitor economy and local communities.
“A thriving pub sector is critical to local employment, tourism, and the social fabric of New Zealand. Reducing excise on draught beer is a practical step that backs venues, backs jobs, and backs communities,” Kristy says.
Shift away from on-premise consumption
The groups say on-premise beer consumption has declined significantly over the past decade, with market share dropping from around 40 per cent to 15 per cent as more consumers choose to drink at home.
Survey data indicates cost is a key factor, with 47 per cent of respondents saying they sometimes opt to drink at home due to the cost of going out. Among regular draught beer drinkers, 82 per cent say they often make that choice.
Brewers Guild executive director Melanie Kees says current tax settings are adding pressure across the sector.
“Breweries, especially our small and regional operators, are already under pressure from rising production and compliance costs, and current excise settings increase that burden,” Melanie says.
“Reducing excise on beer served from kegs would support their ability to do business and strengthen the wider value chain.”
Tourism and regional impact
The proposal is positioned as a way to support hospitality venues that are central to the visitor experience, particularly in regional destinations.
Kristy says the sector employs more than 160,000 New Zealanders, many in regional communities.
“This is about keeping beer in supervised community spaces and ensuring hospitality venues and breweries can continue to operate sustainably,” she says.
International comparison
The organisations say New Zealand’s current approach differs from other markets, with countries including the United Kingdom and Australia applying lower tax rates to draught beer.
They argue aligning with these models would recognise the economic contribution of on-premise consumption.
The groups also say the fiscal impact of the proposal would be limited, noting keg beer represents a relatively small share of total beer sales and that increased on-premise activity could lift GST revenue.
