Lion (Beer, Spirits and Wine) New Zealand, the local unit of Japanese brewer Kirin Holdings, says its newly acquired Panhead brand is a "runaway train" and the company can't keep pace with demand.

The Auckland-based brewer and winemaker acquired Panhead Custom Ales from the family of founder Mike Neilson for an undisclosed sum, its second such purchase of a popular craft brewer after buying Dunedin-based Emerson's Brewing Co in 2012. Managing director Rory Glass cited sales growth for its craft beers and the trend of "premiumisation", where consumers seek out better and more expensive beers, for the company's 12 per cent gain in profit in 2016.

Net profit rose to $38.7 million in the 12 months ended September 30, from $34.7m a year earlier. Sales rose 5 per cent to $561m. Total volume sold rose just 1 per cent in the latest year.

"The amazing thing about Panhead is that we can sell every drop of beer they make. It's a runaway train, and so far we just haven't been able to keep up with demand," Glass said in a statement.

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Upper Hutt-based Panhead lifted production by 80 per cent last year. Emerson's volume rose 49 per cent while Lion's Mac's range had 30 per cent volume growth last year, Lion said.

Big brewers have been competing to buy smaller boutique operators in a market where craft beer sales are on the rise, even as overall liquor consumption is down. Heineken-owned DB Breweries, which owns bars and liquor brands including Tui, Monteiths and Redwood Cider, last month announced the acquisition of Kapiti-based brewer Tuatara Brewing Co for an undisclosed sum from shareholders including Wellington-based investment group Rangatira Investments.

Rangitira's valuation of its 36 per cent stake in September implies a total value of $10m.

Lion is ramping up production of its craft beer portfolio. Emerson's is to move to a new brewery in Dunedin in June, the result of a "multi-million dollar investment" that will lift capacity to eight million litres a year from one million litres at its previous site, the company said. It is also investing in Panhead to increase capacity and "unlock Panhead's full potential," it said.

"Our consumers are keen to experiment with new flavours and to trade up to more premium option across our portfolio, and this trend is reflected in our revenue results," Glass said. "While volume growth has seen a small increase in this financial year, per capita volume is still down".

Lion only released a two-page statement with highlights of its full-year results and its financial statements haven't yet been published on the Companies Office website. The company "continued to experience significant cost pressures, largely due to the relatively weak New Zealand dollar compared with the prior year, coupled with commodity price increases," it said.

In November, the NZX-listed brewer Moa narrowed its first-half loss to $1.2m, lifting sales while reducing expenses, and said it is on the look-out for acquisitions, having signed distribution agreements with Wellington's Parrotdog. It has cited AC Nielsen Grocery data to show it ranks third in its share of the New Zealand craft beer market behind the craft-style beers of Lion and DB. In the first half, the volume of its New Zealand sales rose 15 per cent to 923,904 litres.

Another Wellington craft brewing mainstay, Garage Project, is outsourcing to ramp up production, announcing last month a deal with bStudio in Hawke's Bay, which will brew its beer at a new facility in Napier.

Globally, brewers have been rationalising their assets. DB's owner Heineken this week agreed to acquire Kirin's struggling Brazilian operations for about 664 million euros, while Kirin has reportedly agreed to buy Myanmar's Mandalay Brewery for several hundred million yen, bringing its control of that beer market to 90 per cent. Kirin acquired Myanmar Brewery in 2015, gaining its initial 80 per cent share of that market.