DB brewery becomes victim of success

By Phil Boeyen, ShareChat Business News Editor

Thursday 22nd March 2001

DB's (NZSE: DBG) West Coast brewery is paying the price of success with the company announcing it will close down because its Monteith's beers are so popular.

Group MD, Brian Blake, says volume at the West Coast plant has grown by 250% since 1995, and to meet continued levels of production would require a costly and significant upgrade.

Instead of upgrading the company has decided to transfer production to Auckland and will close and decommission the West Coast operation over the next four weeks.

"The investment required to increase the plant's brewing capacity along with a major upgrade of its packaging facilities is just not commercially viable," says Mr Blake.

He says while premium beers such as Monteith's are increasing in popularity, overall beer consumption in New Zealand has declined by more than 27% over the past ten years.

"This reduced level of beer consumption throughout New Zealand means that DB Breweries has existing excess capacity at its other breweries and we must utilise this capacity.

"Manufacturing out of Auckland provides logistical advantages for our next challenge - to develop export opportunities in selected markets through the South Pacific and Asia."

Part of the value of the Monteith's brand has been its West Coast origin, which beer drinkers have seen as giving it a boutique edge because it is not brewed in the same place as more high-volume brands. However Mr Blake is promising the character of the beer will be sustained.

"We have brewed trial batches of all Monteith's beers and are very satisfied with the results."

The company says fourteen staff and their families will be affected by the closure.

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