Craft beer businesses say it’s harder then ever to stay open as cost pressures climb, including CO2 needed for brewing.
Brewing has been one of the industries hit hard by climbing prices and supply insecurity as gas reserves have dwindled.
CO2, a byproduct of gas processing, is stored and sold on as a liquid.
Our only onshore source was at Kapuni, but when the plant temporarily shut down for repairs in 2023, prices skyrocketed and have never returned to previous levels.
Brewers were also facing low consumer confidence, higher excise taxes, wages, and prices for hops and grain.
Invercargill brewer Nathan McKenzie from Hopsession Brewing said he called his CO2 supplier after receiving a hefty bill, believing it was a mistake.
“I rang the head office up like ‘no you’ve billed me wrong here. I can’t be paying this much for CO2’. But unfortunately, they were saying to me, ‘no, that’s what it costs’.”
Simon Ross, from Wānaka’s Rhyme and Reason Brewery, said: “Nobody wants to pay anything anymore for a pint in the pub, but we’re getting more and more cost pressures from all sides really.”
Brewers relied on CO2 to fizz the beer and to stop it from spoiling. The gas was also used to push liquid from kegs, to taps and into glasses.
While costs varied between suppliers, figures shown to 1News by brewers went up from 94 cents per kg in 2021 to around $4.30 in 2025.
Price hikes and insecurity of supply were also affecting other gas products.
BusinessNZ, who regularly met with ministers, have called it a “crisis” for gas users.
A spokesperson for the business advocacy body, Catherine Beard, said brewers “have either reduced production or reduced staff numbers”.
“Some are actually literally shutting down.”
The Government this week announced it was widening the scope of a $200 million fund for co-investment in gas drilling, and upgrading processing and storage facilities.
“We are very supportive of that, but we actually need the major political parties to all be in agreement on this. We can’t have flip-flops and U-turns every time we have a change of government,” Beard said.
But the Ministry of Business, Innovation and Employment has forecast that lifting the ban on oil and gas exploration would increase New Zealand’s carbon emissions by 51 million tonnes by 2050.
Meanwhile, researchers were reviewing other options for liquid CO2 supply.
“There are some small companies who are looking at ways of burning wood energy and capturing the CO2 from that, there are other companies who are looking at producing CO2 from geothermal fields,” University of Canterbury associate professor David Dempsey said.
Resources Minister Shane Jones has been approached by 1News for comment.
