Trusts might have to brew their own

Press, 22 May 1978, Page 16

Trusts might have to brew their own

P A Wellington North Island licensing trusts are considering opening their own brewery, with Japanese finance. The vice-president of the New Zealand Licensing Trusts Association (Mr E. Ogier) mentioned the possibility in a report to the annual meeting of the association’s central region in Mast.erton. He said every gallon of beer bought by a trust “made a contribution to the losses suffered by brewery-owned hotels and taverns.” These were suffering just the same problems as trusts in making a profit on their retail outlets. “Unless a satisfactory solution is found, North Island trusts will be obliged to consider establishing a new brewery funded offshore by Japanese connections,” said Mr Ogier. Mr Ogier said the new legislation (for ancillary licences) was resulting in a segregation of patronage. “Ancillary licences are allowing favoured club members to drink within a privileged social club atmosphere, leaving the less privileged to drink in the traditional public tavern and hotel outlets,” he said. “I believe this would be a cause of the increasing

violence in public drinking outlets. “Apart from the social consequences, the economic effect of this reduced patronage will also be far reaching. “A further matter for concern is the continued aggregation of wholesale licences and the extent to which the near monopoly interests of the liquor industry are controlling the future direction of wholesale marketing, in particular the manipulation of spirit brands. “In total, the economic effects of ancillary licences with their subsequent loss of patronage, the constrictions suffered as a result of the monopoly wholesale interests, and the significant growth of wine and sherry sales for home consumption, are cause for grave concern,” he said. The nossible impact of the tavern tax now being reviewed by the Government would seriously affect taverns, said Mr Ogier. “There are two possible alternatives — either a substantia! increase in the retail profit margin or a shift in the profit margin from the brewing sector to the retail sector,” he said. The only other alternative would be for trusts to open their own brewery.