The New Zealand brewing industry is set for a massive shock after France-based multi-national Malteurop announced they will close their malt plant in Marton at the end of September.
Malteurop is the main supplier of malt to New Zealand’s big three breweries — Lion, DB and Asahi (formerly Independent) — and it also provides malt to a large chunk of the craft market through Cryer Malt. It’s estimated Malteurop supplies around 70% of the total malt market.
Malteurop’s local rival Gladfield are confident they can pick up a lot of the slack as they’ve been building capacity at their Dunsandel malting plant but that doesn’t start to account for the massive headaches this will cause the local industry as it transitions.
The biggest immediate effect will be on the town of Marton, with many families in the area supply the work force for Malteurop.
The big three breweries will be scrambling to find new malt suppliers, with the most likely source of malt being from Gladfield and then Australia where Malteurop has a plant in Geelong with capacity to service the New Zealand market. Barrett Burston also has a malt plant in the same area and could also help fill the gap.
Smaller craft breweries also have the option of going to Gladfield for local malt or using Cryer Malt or Bintani to buy imported grain from other global suppliers.
But those alternatives come with huge logistical and price problems — with one source telling me that the infrastructure in New Zealand is not set up to get malt into grain silos from shipping containers … everything has been designed around trucks.
Another brewer noted that he now has to change all his recipes when he switches to a new supplier.
And a lot of New Zealand breweries make a point of using locally-grown ingredients: that is going to be more difficult for many.
For a trans-Tasman brewery such as Lion it might be easier in the long run to brew beer in Australia and ship it back to New Zealand rather than importing malt. I’m not saying that’s what going to happen, but it could be a more sustainable solution.
The irony for the big breweries is that the malt plant was originally owned by DB and Lion jointly, originally based in Christchurch’s Heathcote Valley. They moved it to Marton in 1999 and sold it in 2003, with Malteurop taking ownership in 2008.
Big Breweries looking at options
DB Breweries said they would use Gladfield and imported malt.
“Malteurop has been a long-standing supplier to the New Zealand brewing industry, and we were sad to learn that they will stop malt production in New Zealand,” they said in a statement.
“We like to source ingredients locally wherever it is practical and commercially viable to do so, so we will continue to source New Zealand malt where we can from other suppliers such as Gladfield. We are also securing additional malt from established offshore sources, including Australia, to complement local supply. We are actively planning for this transition and do not expect any impact on the availability of our products.”
Lion NZ said: “We are currently looking at the implications and alternative options for our business.”
Doug Michael from Gladfield admits his business will benefit from the Malteurop exit and he has been planning for this for a number of years.
“There’s a number of reasons why they’re closing, but the reality is that they’re a big multi-national company and the malting plant that they have here in New Zealand is just a tiny part of their business and that plant’s pretty much reached the end of its life. They were going to have to put a fair bit of money into it to keep it going,” Michael said
“And the other thing you’ve got to remember is that beer consumption in New Zealand has dropped like everywhere else. As a result, the demand for malt has dropped considerably, so it’s no longer viable for them to be running that plant there in Marton.
“We’ve got the capacity to fill all that space here, and that’s probably one of the reasons why they’re closing as well, because we’re putting a lot of pressure on them. So we’re basically filling that gap now. Most of the barley’s grown in the South Island now as well, and we’ve got 180-odd growers now contracted to Gladfield.
“There should be absolutely no reason to be concerned about supply. There’s no real need for anyone to be panicking, although I do know that there’s probably one or two people thinking that the sky’s going to fall.”
Michael says that while Gladfield has an effective monopoly domestically, malt is priced globally so there will be other options for breweries.
“It’s not like it’s just a one-horse race. There’s plenty of other suppliers out there. And the reality is, is that the world malt market is saturated. And so, these big malting companies around the world are starting to restructure now, and there’s been an over-capacity as beer consumption drops.
“If they don’t want to use our malt, you can still bring it in from Australia. You can still bring it in from Europe and UK. It’s a commodity and the reality is there’s no shortage of it.