Auckland’s cheap spirits hit Australia

Press, 3 August 1985, Page 1

Auckland’s cheap spirits hit Australia

New Zealand is competing so successfully with Australia in spirits that a Melbourne bottling plant will close this month with the loss of about 60 jobs. New Zealand prices are competitive, in spite of the greater distance from the markets and the higher freight charges. Cheaper labour in New Zealand, cheaper bottles, tax incentives, cheaper bulk spirit, and until recently Government export incentives, enable New Zealand producers to compete. With closer economic relations New Zealand can ship spirits into Australia paying the same excise as Australian bottlers. The Melbourne bottling plant is owned by Gilbey’s Australia, which is owned by W. and R. Gilbey of Britain, which in turn is owned by International Distillers and Vintners of Britain. New Zealand Wines and Spirits, owned' by Lion Breweries, has a bottling plant at East Tamaki in Auckland which will bottle the spirits for Gilbeys.

The managing director of New Zealand Wines and Spirits, Mr Devon Hearn, said from Auckland yesterday that the bottling was a rationalisation of operations which had been planned over the last six months. The first containers of Gilbeys gin and Smirnoff vodka would be shipped to Australia this month and this alone would earn $4 million in exports to Australia a year, he said. New Zealand Wines and Spirits has been exporting to Australia and other countries for three years or more and exports to Australia are worth about $8 million a year.

Mr Hearn said that the high cost of freighting from Melbourne to the main markets in New South Wales and the quality of the New Zealand product were factors in the decision to rationalise. The company was concerned about the strengthening of the New Zealand dollar against the Australian dollar and also wanted the Government to be clearer on long-term export incentives.