A source familiar with the situation has said that the state government failed iconic Launceston brewer Boag's by ignoring its concerns over various problems. Loginor signup to continue reading. Those included the introduction of an expensive container refund scheme and TasWater's demand that it treat its own trade waste, which might cost the company millions. The container refund scheme, which is due to be introduced soon, will be funded primarily by beverage companies and is estimated to cost Boag's 10 million. TasWater's demand that Boag's make investments to treat its own trade waste water on site would also cost several million dollars, the source said. Boag's Brewery owner Lion Australia last weekconfirmed it was considering shifting manufacture of some of its beer to the mainlandto rein in costs. If enacted, the decision would affect 15 jobs at the Launceston site, the company confirmed. Business, Industry and Resources Minister Eric Abetz said the state government understood there are economic and cost factors putting pressure on many companies. Lion Australia managing director James Brindley attributed the decision to freight costs, declining beer sales and the sharp increases in federal excise tax. The company is proposing to only brew beer destined for Tasmanian drinkers in the state. The other half of the company's Tasmanian production, which is presently shipped over Bass Strait to mainland and even overseas drinkers, would be brewed interstate. He said the company pays 1.5 million per year to ship beer to the mainland. The latest decision comeseight years after Lion shifted Tasmanian production of nonBoag's brands interstate. According to the source, other factors in the decision were the cost of gas and electricity, which have doubled in price over the past five years. The rising electricity prices have triggered criticism recently that the government is not doing enough to expand supply in the state. The company has long complained that the federal government's Tasmanian Freight Equalisation Scheme does not compensate users for the true cost of shipping freight across Bass Strait. The Department of Infrastructure has been contacted for comment. Under the 2022 rates, the TFES reimburses shippers a maximum payment of 855 per twentyfoot equivalent unit TEU  a unit of measuring shipbased freight. That compared to the 1162 per TEU that some schemeusers have said is necessary to compensate for the true cost of shipping. The source said that after the government's decision last year to provide grant funding to keep the Boag's Visitor Centre open, company representatives met with the government to discuss its other cost concerns. Boag's representatives raised the issue of TasWater's trade waste demands, as well as the rising cost of energy  problems that are affecting many other Tasmanian manufacturers. Since the announcement of the Visitor Centre grant, the government has made no other public announcements regarding Boag's. Mr Abetz said the government has been working with Boag's following the decision over the visitor centre grant. "While we understand there are economic and cost factors putting pressure on many companies, it is not limited to Boag's and as the company has advised directly, their recent decisions have been based on commercial and operational factors," Mr Abetz said. "We continue to work with Boag's following the grant provided to support their visitor centre as a local attraction and promotional avenue for the Boag's name.". While TasWater, the cost of freight and energy costs were big factors contributing to Lion Australia's latest proposal, increasing grain prices and lower beer consumption also likely contributed to the decision. A Lion Australia spokesperson said: "It has been a tough time for large and small brewers, including Boag's. "There were a number of factors that led to this difficult decision, including consumer trends, Federal excise increases, the cost of transporting materials to Tasmania and beer back to the mainland, and other cost pressures. "We remain committed to Boag's, as demonstrated by our commitment to upgrading the James Boag's Visitor Centre.". . . Advertisement. Sign up for our newsletter to stay up to date. We care about the protection of your data. Read ourPrivacy Policy. Advertisement
The state government's failure to address concerns has led iconic brewer Boag's to consider shifting some beer production to the mainland, affecting 15 jobs. Factors such as an expensive container refund scheme and TasWater's demand for on-site treatment of trade waste are catalysts. Rising energy costs, freight expenses, declining beer sales, and federal excise tax hikes also play a part in the decision.