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Price of packaged beer set to rise as brewers pass on higher production costs

Brewers have warned that packaged beverages will become more expensive and could increase by a larger margin that pints at the pub.

Independent and larger-scale brewing companies across Australia are feeling the pressure of a recent increase in excise tax, as well as a spike in aluminum and ingredient prices.

Wilson Brewing Co founder Matt Wilson said brewers had tried to keep prices as low as possible, but it was inevitable they would rise.

“You’re not only going to see an increase in pint prices at the pub, you’re actually going to see a larger increase of packaged product that you would purchase and take home to drink,” he said.

Excise tax strain

The alcohol excise tax increases every six months, and the most recent hike of 3.84 per cent for full-strength beer was the largest in 20 years.

Mr Wilson said brewing costs had ballooned by about 60 per cent over the past two decades, and that flowed on to consumers.

“You might see a $5 to $10 raise in carton prices coming up around Christmas time or even before,” he said.

“The unfortunate thing about excise taxes, it never goes backwards.”

Man behind bar at the pub with a beer
Mr Wilson says carton prices could rise by up to $10 by around Christmas time.(ABC Great Southern: Sophie Johnson)

Everything is going up

There are multiple inputs that go into crafting and brewing beer, all of which have inflated.

Mr Wilson said aluminium, used to package cans of beer, was rising in cost.

“Grain, barley especially, is the highest spec of barley of grain that a farmer can grow to … so their direct energy input costs is directly reflected on the price that they’ve charged for their grain,” Mr Wilson said.

“grain [is probably] our third biggest input.”

Bird's eye view of header harvesting a paddock of barley
The cost of barley production is affecting the ingredient price for brewers.(ABC Great Southern: Tom Edwards)

GrainGrowers chief executive David McKeon said Australian barley prices were trading above historical averages.

“Right across Australia, we’re looking at bids anywhere into the low to mid three hundreds for for barley [dollars per tonne] … it’s a fairly strong price,” he said.

He said it was important to not only consider the raw price of barley going into an end product.

“We are seeing a lot of other factors influencing a lot of our processors, manufacturers and retailers … some of those [being] challenges around supply chains, freight costs, labor costs, and energy costs,” Mr McKeon said.

Resource analyst Tim Treadgold said aluminium, a popular material choice for packaging, was an expensive item to produce due to the amount of energy it required.

“In order to get the can through the plant onto a truck off to the bottling or packaging depot … the trucks that haul up there are running on liquid fuels, which are also expensive,” he said.

“The energy input into the whole process has gone up substantially in all facets of production.”

Taps of beer at a bar
Packaging takes up more than 20 per cent of Mr Wilson’s input costs.(ABC Great Southern: Sophie Johnson)

Worse than COVID-19

Independent Brewers Association chief executive Kylie Lethbridge said she had concerns for the industry.

“We fared … relatively well out of the last two years of the pandemic, but by no means are we in recovery mode, in fact, some feel that this is more of a challenge,” she said.

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Why is everything so expensive?

She said skill shortages, material shortages and challenges such as freight costs would be applicable to any business in the country.

“If those waves keep hitting, then there is only so much a business can stand, and sadly, that may mean we lose… some independent breweries around the country.”

“The challenge … for the consumer is that the price of beer will rise, whether you drink it in the pub from a tap, or whether … you pick it up from the bottle shop,” she said.

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Business

Northern NSW’s guava growers consider replacing ‘declining’ crop, but exotic fruit finds home in sour beer

The last remaining commercial guava farmer in the Northern Rivers of New South Wales is preparing to rip out two-thirds of the orchard’s 3,000 trees.

It follows one of Australia’s largest growers bulldozing his orchard on the Alstonville plateau earlier this year to convert to macadamias.

Now Phillip and Janice Schmidt at nearby Newrybar are also considering the popular native nut as a replacement tree crop.

“Avocados? Macadamias? We’re yet to make our mind up, but obviously, the land should be kept productive for the sake of the country and everyone,” Mr Schmidt said.

A pile of guava trees bulldozed.
Guava trees bulldozed and pushed into piles on the Alstonville Plateau.(Rural ABC: Kim Honan)

The Schmidts sell guavas from 1,000 trees to Brisbane, Sydney and Melbourne markets for a premium price.

But the fruit from the remaining 2,000 trees, previously sold for juicing, is being left to rot on the ground or gobbled up by cattle on agistment.

The former CSIRO geologist, who “accidentally” fell into guava farming when he bought the coastal property on retirement, said they were not dependent on the juicing income, but for others in the industry, it had been devastating.

“It’s been a declining part of our industry for over 10 years, and it’s finally reached the stage where I don’t think any guavas from northern NSW are used for juicing,” he said.

“We don’t really know what the cause of it is, but I suspect that imports from overseas could be a factor.”

But Queensland-based processor Tropico Fruits has confirmed it does not import any guava product for its juices.

Three black cows and a white bull in a guava orchard.
Mr Schmidt says the cattle love the guavas.(Rural ABC: Kim Honan)

The company has in previous years bought guavas from the Northern Rivers but said it never had juicing contracts with growers.

Tropico Fruits chief executive Dave Alderton said it had individual standalone seasonal arrangements based on each year’s supply and demand.

He said that despite offering such an arrangement this year for guavas, neither grower in the Northern Rivers was able to supply the fruit.

A man holds a yellow skinned guava with pink flesh inside.
Newrybar Guavas mostly grow Hawaiian pink guavas and some whites.(Rural ABC: Kim Honan)

Constant rain hurts guava harvest

In addition to the unsold juice fruit, the weeks of rain during this year’s harvest resulted in an excess of table fruit on the farm.

Mr Schmidt said that initially, it was looking like a bumper guava season.

“But then we kept on having rain, more rain, more rain until we reached the point where we were unable to actually pick the fruit because we had no means of accessing or at least getting a vehicle down to take the fruit out,” he said.

“We lost two weeks when we just simply couldn’t get down here, and those two weeks are probably our most productive actually.”

Two green skinned guavas hang in a tree.
These guavas will be sold to Melbourne, Brisbane or Sydney markets for a premium price.(Rural ABC: Kim Honan)

The result was a lot of fruit too ripe for the market that ended up being shared with friends or given to the cattle.

“The cattle love it,” he said.

“They actually follow us down to the packing shed, and they turn up at the packing shed and wait outside.”

The upside to the constant rain was much larger guavas, with the skin able to keep up with the growth of the fruit without splitting.

Guavas saved for sour beer

While the 40-year-old guava industry in the Northern Rivers has declined dramatically, the craft brewery sector in the region is booming.

The newest brewery, Common People Brewing Co at nearby Bangalow, is working with local producers on special batch brews.

A glass of light colored beer sits on a bar in a brewery with a lady pulling beers in the background.
Common People Brewing Co produced a seasonal beer using excess fruit from Newrybar Guavas.(Rural ABC: Kim Honan)

General manager Jay Kempnich said they sourced some of the Schmidts’ excess fruit to make a limited edition seasonal beer for the weekend’s self-drive Harvest Food Trail.

“We infused guava and some of our fresh lilly pillies from our own trees from out the front of the brewery here into a sour beer and made a delicious, refreshing guava beer,” he said.

The brewery, which opened in January, brews 600 liters at a time with eight beers, three of those its flagship beers.

Two men in black shirts standing and smiling in front of brewery tanks.
Brewery founders and co-owners Drew Tourle (left) and Jay Kempnich.(Rural ABC: Kim Honan)

“Then we’ve got the other five taps that are dedicated to doing seasonal and special batch brews, using local ingredients from the area and collaborations with local businesses where we can,” he said.

Another of those collaborations is with Barefoot Farm Byron, a pecan grower and processor in the nearby Eltham Valley.

“We put 10 kilos of their pecan nuts into one of our 600-liter batches and have done a full batch of a pecan-infused brown ale,” he said.

Four cans of beer sitting in a fridge.
The Bangalow brewery has used local pecans to make brown ale.(Rural ABC: Kim Honan)

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