Tensions Soar in New Zealand as Shortage of Bourbon Hits

Tensions Soar in New Zealand as Shortage of Bourbon Hits

As supply chain pressures and delivery delays are felt around the world, New Zealand is being hit by a nationwide bourbon shortage, which also affects the craft beer and chicken nuggets markets.

“It hurts,” said Neil, a worker at the Bottle-O store in Mt. Eden. “Right now, bourbon is in short supply. We can’t get anything from outside America.”

For months, retailers — and some particularly loyal customers — have struggled to restock. The worst shortages have hit pre-mixed ready-to-drink (RTD) beverages, particularly bourbon and cola mixes, which are very popular in New Zealand. “Bourbon RTDs is like our bread and butter — if you sell bread in a liquor store,” Neil said. “You’re very popular here.”

The shortage was confirmed by Brendon Lawry, chief executive of the Liquorland NZ chain. He said suppliers across the country had “experienced shortages of bourbon for the production of RTDs over the last four to six months,” partly due to delivery delays. “We hope this is a short-term problem,” he said.

Bottlenecks in the spirits industry have been brewing internationally since 2021, driven partly by people drinking more spirits during the pandemic. The Wall Street Journal reported that Diageo, the multinational spirits company behind whiskey brands like Johnnie Walker and Crown Royal, warned in January of shortages amid rising demand. Many spirits can take months or years of aging before hitting liquor store shelves — making it difficult to ramp up production suddenly.

“It’s like an unfortunate perfect storm,” said Robert Brewer, chief executive of industry organization Spirits New Zealand. Brewer said the shortage in New Zealand was a mix of global delivery delays, rising spirits popularity, and a bottleneck in the supply chain from Kentucky and Tennessee, where bourbon is typically made.

Dr. Bill Wang, a supply chain management specialist at Auckland University of Technology, said the era of the Covid-19 pandemic “is putting global supply chains under severe pressure and disrupting trade.” To circumvent some disruptions, “many companies are looking to alternative supply through local, regional collaboration,” Wang said — but that strategy wouldn’t help single-origin products like bourbon.

New Zealand is a heavy-drinking nation with a growing passion for spirits, wine, and beer. Figures from Spirits NZ, which accounts for around 96% of the market, show that in the year to April 2022, more than 2 million liters of straight bourbon were sold – to a population of around 3.65 million adults. And that’s despite the impact of Covid, which Brewer said has “hit us by about overall [a] 10-12% drop in sales”. Before Covid, it was 2.2 million liters of bourbon — a 22% increase from two years earlier. In addition to pure spirits, the industry has sold 70 million liters of RTDs and about 400 million wine and beer. On a per capita basis, “the total means that every New Zealander drinks on average almost two standard drinks a day,” according to alcohol harm organization ActionPoint.

While bourbon shortages have been noted nationwide, it’s not the only alcohol under pressure, as carbon shortages cause problems for craft beer brewers and RTD makers. Producers across the country have been struggling to get affordable carbon supplies – which are used to make carbonated drinks, a range of foods, and some beers – since the country’s last remaining carbon producer announced it would be conducting maintenance until August.

Dylan Firth, the executive director of the Brewers Association of New Zealand, said smaller craft brewers had been hit the hardest.

“It’s more of a problem for the smaller guys who don’t have one [CO2] capture process. Since CO2 is produced in the fermentation process, some larger breweries will have the opportunity to capture it,” he said.

As well as carbonated drinks, CO2 is used in food production – including chicken nuggets, which have been shown to have disappeared from supermarkets in recent months. “I don’t think it’s that bad,” Firth said. “If this maintenance continues or is completed later than August, it could cause widespread problems.”

All this in a country where it is legal to distill, one of the few Westernized Countries that permit an individual to home distill. 

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