Is this the end of the craft beer revolution?

Liberty Brewing Co directors Christina Pickwell and Joe Wood sold their kegs to Konvoy Kegs and rent them back – but that company has been put into receivership.

Photo: Supplied

Who'd have thought that, in New Zealand, stale beer was becoming an issue?

But less than a decade on from the golden days of the craft beer revolution, the tide appears to be going out on boutique breweries.

They're facing hospitality-related headwinds, annual excise tax rises, wild cost swings in beer delivery prices thanks to the fuel crisis, no relief from excise taxes, a food-grade CO2 shortage and a keg crisis.

And that's not to mention a young generation that no longer heads to the pub for a pint with mates.

Thursday's episode of The Detail looks at the troubles with brewing, and why some in the industry are still looking at the glass half full.

The co-founder and director of Good George, Brian Watson, says for seven or eight years craft brewing has operated in the "land of milk and honey - everything was growing, everything was up, the tide was coming in. [But now] the tide's going out as it does in a lot of industries.

"It will come back again, it's just a case of when."

Watson is also the board chair of the New Zealand Brewers' Guild.

"No one really knows what's coming next," he says. "We seem to have had year after year of challenges.

"Every year, whether it's a CO2 crisis or whether it's inflationary pressures ... or obviously Covid and the shipping crisis after that, it's just been one thing after another."

The latest is a problem with the kegs that breweries use to get their lager into pubs.

New Zealand has two companies that manage, track and truck empty and full kegs, and get them into pubs without any disruption to supply.

They are Kegstar and Konvoy.

Konvoy is now in liquidation, meaning there will no longer be any competition in this area - Kegstar is the only company standing.

Kegstar did offer to buy Konvoy's assets but the Commerce Commission ruled against the acquisition, not happy with the prospect of a monopoly and potential subsequent price hikes. Kegstar is currently appealing that decision.

The uncertainty has led to some breweries cutting back production, worried about their beer going stale if they can't get it out to the pubs.

Christina Pickwell, the co-founder of Liberty Brewing, based in Helensville, says it's brewing less, more often, to keep the beer fresh.

Breweries used to have their own kegs, but she says it wasn't a great system. Kegs would go missing in transit, or get stolen, and there would be supply gaps - and they are extremely expensive, about $230 for each keg.

The keg companies "were a godsend", she says, enabling breweries to lease their kegs.

"We'd have beer sitting in the tank, and no kegs to be able to fill because they were not getting returned to us on time ... so the leasing model was a very good one for us."

Owning your own fleet of kegs could cost a brewery hundreds of thousands of dollars.

Pickwell says learning that Konvoy had gone under gave her "instant fear of how the heck are we going to sell our beer?"

Keg sales account for 30 percent of Liberty's operation but have a higher margin than packaged beer, threatening the profitability of the brewery.

Breweries didn't want Kegstar to take over Konvoy because of the resulting lack of competition, and lobbied the Commerce Commission against the move. Konvoy is still running but is going through the liquidation process. Pickwell says some brewers have started hoarding kegs which is causing problems for everyone else.

"We are hoping for the best outcome because there is no way we can afford to purchase all of our own," she says.

"It is terrifying, actually, to see how hard business is at the moment to do. I start to see the light at the end of the tunnel and I just think yes, yes we're going to get there ... then something else will happen like the fuel crisis and ... we just get hit again.

"I'm still optimistic. I still feel like collectively we are all going to be okay and we're going to get there. We just need to keep working our way through these challenges one at a time."

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