Beer industry shocked by closure of Tasmanian James Boag's brewery
Production of Boag's beer in Launceston will stop in November. (ABC News: Kate Nickels)
In short:
Beer industry stakeholders have been shocked by the announcement that James Boag beer will no longer be produced in Launceston.
Some say the closure points to significant issues in the industry, which are particularly hard on independent breweries.
What's next?
The 145-year-old brewery in Launceston is due to cease production in November this year.
Australian beer industry stakeholders say the closure of an iconic Tasmanian brewery has left them shocked, some pointing to the growing "unaffordable" cost of brewing beer in Australia.
Today, brewer James Boag announced it would stop production at its Launceston brewery in November.
The 145-year-old brewery has branded its products as being "from the pure waters of Tasmania".
Now, parent company Lion Australia will complete its move of Boag's production to entirely outside of the state.
Boag's brewery has been a part of Launceston for 145 years. (ABC News: Emily Smith)
'Terrible for Launceston'
Local Launceston brewery owner Sam Reid said he was "shocked and taken aback" by the announcement, considering the recent state funding injected to the facility.
"We feel for the staff who have lost their roles there, [it's] terrible for Launceston, terrible for the staff and their families," Mr Reid said.
"I thought they were going to be staying focused and committed to Launceston for a while.
"It's not the cost of making beer in Launceston, it's the reality that most of their beer is made at their huge brewery in Lidcombe in Sydney and just the efficiencies they're getting.
"It's probably starting to outweigh the benefits of making beer here in Launceston."
Sam Reid says he hopes the $1 million Boag's will pay back to the state will be re-invested into local breweries. (Supplied)
In 2023, the brewery received $1 million in funding to keep its visitor centre open.
That money will now be paid back, the company says.
At the time, Premier Jeremy Rockliff said the tours promoted other local businesses and were a tourist drawcard.
Mr Reid, who operates the Du Cane Brewery, said he hoped the $1 million in state funding would be redistributed to other local breweries.
"The new Spirit [of Tasmania ferries] are coming into operation this year, we've got a host of small Tasmanian-owned and made breweries in the north of the state," he said.
"There's really a great opportunity to invest in the tourism and visitor economy side."
"Some of that million dollars could hopefully be used to continue to invest in the visitor economy."
'I can't believe it'
As for the drinkers of Boag's, the news of the brewery's looming exit came as a shock.
Leigh Sherriff describes the business decision as "disgusting". (ABC News: Emily Smith)
Leigh Sherriff said he had enjoyed Boag's "for about 70 years" and said the closure was "disgusting".
He said Boag's was "as good as any of the beers from the mainland".
Craig Barron was shocked by the news. (ABC News: Emily Smith)
Craig Barron said the company leaving Tasmania was "not good".
"It's an institution, it'll put people out of work.
"I can't believe it, to be honest."
Cost of beer, costing businesses
Sabrina Kunz says the excise tax regime is making beer "unaffordable". (ABC News: James Carmody)
Independent Brewers Association chief executive Sabrina Kunz said the closure was indicative of the rising cost of brewing beer in Australia.
"For a company the size of Lion, [Boag's] would have been one of their smallest production facilities and they have the opportunity to keep the brand of Boag's going by presumably transferring to one of their larger production facilities," Ms Kunz said.
"Our breweries are simply closing down, we've lost something like 80 breweries over the last two years nationally.
She has called on the federal government to look at reforming alcohol taxes, which are higher for beer than wine, due to the way the tax on each is calculated.
Sabrina Kunz says the beer industry is struggling nationally. (Supplied)
"Aussies want to be able to shout a round at the pub, they want to be able to host their neighbours for a barbecue and the excise tax regime is making it such that it's simply unaffordable," she said.
"We have been saying for years that the cost of a pint made by a local Australian brewery is becoming unaffordable."
In a statement, Federal Assistant Treasurer Daniel Mulino said the federal government valued and supported alcohol producers and hospitality businesses.
"In March 2025, prior to the last election, we promised to freeze the indexation on the draught beer excise and customs duty for two years and have subsequently passed legislation to deliver on this," he said.
"We also increased the alcohol manufacturers excise remission scheme and Wine Equalisation Tax Producer rebate, up from $350,000 to $400,000 from 1 July this year.
"Australia's distillers, brewers and wine producers make a significant contribution to our economy, and we'll continue to provide support for this vital industry."
Owen Johnston says the industry is facing significant issues. (ABC Landline: Tim Lee)
Hops Products Australia chief executive Owen Johnston said it was a "terribly sad day for the history of Tassie beer".
"We do know the industry has significant structural problems," he said.
"Beer volumes peaked in Australia back in the 70s, so you can say for forty years or more we've had declining beer volumes."
"The capacity in the network of breweries around the country, especially with the big brewers, has always been in excess."
Boag's main rival 'committed' to Tasmania
Hobart's Cascade and Launceston's Boag's have had a long-standing rivalry in Tasmania. (ABC News: Luke Bowden)
Rival major international beer brand Asahi, which owns Hobart brewery Cascade, today confirmed in a statement it would not be following suit.
"Asahi Beverages, the owner of Cascade, is committed to the future of the iconic brewery — Australia's oldest brewery," a spokesperson said.
"This year, we committed $13 million for a capital upgrade of Cascade brewing and cider equipment.
"It's the biggest investment in the site for more than a decade and ensures Cascade continues to brew beer in Tasmania for Tasmanians for years to come."