Beer prices up but alcoholism unlikely to fall

Beer price rises are unlikely to cut alcohol dependency, a Tauranga expert says.

DB Breweries announced this week its packaged beer and cider would go up in price by 3 per cent on average from March 5, with tap beer rising 1 per cent.

The brewery's beer brands include Tui, Monteiths and Heineken.

DB's ready-to-drink brands will go up by an average 4 per cent.

Lion Nathan would not rule out a similar price increase, although Independent Liquor chief executive Julian Davidson said they had no plans to increase prices.

Get Smart Tauranga Drug and Alcohol Services manager Stuart Caldwell said there was a general consensus among experts that an increase in alcohol prices produces a decrease in consumption.

"This is why one of the submissions of the Alcohol Law Reform Bill recommended the Government raise the tax on alcohol.

"Beer is one product that is less affected by price increase, and has more of what economists call price elasticity than wine or spirits.

"Typically a 3 per cent rise in beer prices would only result in about a 1 per cent drop in consumption. The alcohol companies are very careful not to upset their cash flow, they especially want to keep New Zealand's 700,000 heavy drinkers happy."

But Mr Caldwell did not think a 3 per cent price increase would have any serious effect on sales.

"Nor will it help to stem our huge and growing Kiwi alcohol dependency problem."

Mount Maunganui GP Tony Farrell said an increase in the price of beer could possibly reduce consumption but would not in itself have a significant impact on alcohol-related problems.

"If prices are raised as well as reducing availability and reducing advertising, if you do them together you could get a real impact."

Hospitality Association chief Bruce Robertson said members would be advised to pass on the increases to patrons as soon as possible.

"Businesses are currently struggling in terms of profitability, we're seeing ongoing closures.

"And while it's challenging for them to pass it on, while they don't they're putting their businesses in jeopardy ... and putting at risk the jobs of their staff."

DB managing director Brian Blake said higher raw material prices and the increased cost of packaging and distribution led to the "unavoidable" price rise.

"We've tried to limit the price increase to a lowest possible increase that we can put through ... the simple fact is that we can't carry on incurring those costs."