Now they're shrinking our 'Red' beer can here

By CHRIS DANIELS consumer reporter

It's Red mate, but not big like a fire engine.

Lion Breweries is set to shrink the size of its cans of beer, from 355ml to 330ml - 7.5 per cent- while still charging drinkers the same amount.

But the international brewer has claimed it is doing can drinkers a favour, by saving the humble Kiwi can of beer from extinction.

Corporate affairs director Graham Seatter said it was getting more expensive to make cans, and sales had dropped 17 per cent in the past five years.

"Due to decreasing can sales and increasing production costs per unit, the reduction in can size is necessary to ensure the long-term sustainability of canned beer production.

The cans will shrink at the start of next month, the same time as the regular increase in alcohol excise tax, but this price rise will not be levied on the new, smaller cans.

Lion says drinkers will pay the same amount for a can as they do now. However, from next month, a 330ml can will be slightly cheaper than a 330ml stubby, if retailers pass the price differential on.

The shrinking of beer containers was first tested by Lion on its Australian beer drinkers, when it cut the size of its bottles last year.

The New South Wales Fair Trading Minister was inundated with calls from angry drinkers, but Lion says sales were not affected.

"Things really quietened down" in Australia, said Mr Seatter, when "people understood that the amount of beer in a can is but one component of the cost."

Transport, packaging, distribution and marketing costs all remained the same, meaning a reduction in beer did not mean a corresponding reduction in cost.

Whether this ingenious explanation washes with New Zealand drinkers is yet to be seen, but the chief executive of the Hospitality Association, Bruce Robertson, said he did not expect prices to change.

While Lion claimed it would not pass on the expected excise tax increase in June, it did not have to, since it was paying less tax on each can, because they would have less beer in them.

Mr Robertson said it was not simply a matter of Lion saving the beer can in the face of declining popularity.

Breweries and retailers were trying to shift drinkers away from cans and into the "premium market."

"Does it really matter whether people are drinking cans or bottles? The issue is where the profit margins are."

Alan Gourdie, general manager of sales and marketing at DB Breweries, said the company was not planning to reduce the size of its cans.

Can sales were down, though supermarket sales had led to some recent increases.

There was no real difference to DB in the cost of making a bottle or can.

"There was quite an uproar in Australia about it, but the consumer will vote," he said. "We are interested onlookers."

Several years ago DB increased the size of its cans from 355ml to 375ml, without changing the price. It later reduced them back to 355ml, without a corresponding price cut.

Levin man Dave Collis, who owns a collection of 6000 beer cans, said New Zealand was one of the few countries in the world where beer cans were shrinking, not getting bigger.