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An iconic northern Tasmanian beer will move some of its beer-making operations to the mainland in response to a declining market and increased manufacturing costs.
Lion Australia, the parent company of James Boag's Brewery in Launceston, has revealed Boag's beers sold in mainland Australia would soon be brewed there.
But Boag's beers sold in Tasmania will still be made in the state.
Lion Australia managing director James Brindley told ABC Northern Drive it was a very difficult decision to make.
"It's a very sad decision and one we felt we couldn't avoid," he said.
"A lot of the beer produced and packed at Boags is sent back to the mainland.
"With the ongoing decline of the beer market, the cost challenges that we're all facing and the fact we bring most of our raw materials to Tasmania and send the finished goods back, it was just a heavy cost burden that we couldn't carry anymore."
What that means is some beer production will move to the mainland.
As a result, 13 redundancies have been announced as the brewery drops from two shifts to one.
Mr Brindley said those 13 workers would be offered work at other Lions breweries.
"It's a sad day. People love this brewery. They love Tasmania, so I can only admire and commend them for their stoicism," he said.
"But clearly, it's a sad day and people are getting upset and bit of a sense of loss."
Lion Australia also owns beer labels Tooheys, Heineken, Hahn, Little Creatures and Guinness, among others.
Boag's steeped in Tasmanian history
As for the products that would be moving to the mainland, Mr Brindley said it would include some contract brands and a well-known Boag's label.
"Probably the most sensitive one is James Boag's Premium. What's consumed on the mainland will now be made on the mainland," he said.
The Boag's beer brand draws heavily on its Tasmanian roots, leaning on the state's natural and pure reputation.
For a beer, that means water. On its website under "history", the site says the brewery "still insists on using the softest Tasmanian water".
"James Boag and his brewers combined the purest Tasmanian water and natural ingredients with their fierce pride and passion, to forge a reputation for making extraordinary beers, that could only be made in Tasmania," it reads.
When asked what that meant for Boag's Premium, Mr Brindley said, "they'll still be brewed to the highest quality with the best-quality ingredients".
While the website says James Boag's Premium is brewed using the "pure waters of Tasmania", Mr Brindley said the company did not advertise Tasmanian water on that product any more.
Beer industry calls for lower taxes
Last year, Lion Australia announced it would close the Boag's Brewery visitor centre citing declining beer consumption, rising costs and the impact of COVID-19.
The company was given a $1 million state government bailout to keep operating.
Now, 18 months later, Mr Brindley pointed to these same issues as those driving the production decision.
"It has been a tough time for large and small brewers, with overall beer sales and production volumes in decline due to changing consumer preferences, cost-of-living pressures and continual increases in federal government excise," he said.
"We have not been immune from these, as well as other challenges in Tasmania. For example, Lion currently spends more than $1.5 million a year on transporting beer back to the mainland."
It is something being felt by breweries across Australia, with the price of beer rising significantly in recent years.
In 2022, industry peak body the Brewers Association wrote to the Morrison federal government proposing a 50-per-cent cut to the excise rate for draught beer, pointing out Australia's beer tax rate was the fourth highest in the OECD.
"With a pint of beer now over $10 in most places, catching up at the pub with mates for a beer is becoming unaffordable for many Australian working people," it wrote.
The campaign was unsuccessful, but the group has continued to raise its concerns, saying the unfair tax increases were "damaging Australia's pubs and clubs and unfairly punishing responsible beer drinkers".