ABSTRACT
The first New Zealand brewery was established in 1835 by Joel Pollack who hoped to sell beer to the local Maoris. Erected at Russell in the Bay of Islands, it was a short-lived enterprise and commercial brewing did not commence in earnest until formal colonisation began in the 1840s (Thornton 1982:53). Population and urban development led to the establishment of breweries throughout New Zealand and by 1886 there were almost 100 plants in operation (see Map 15.1). Limited demand, hostile terrain and high transport costs meant that until the late nineteenth century most breweries were relatively small concerns serving their local market. Scale economies allied to transport improvements subsequently enabled large and relatively efficient urban breweries to invade the markets of their smaller provincial rivals and by 1920 almost half the firms had exited the industry. A strong temperance lobby and a reduction in the number of retail outlets added to pressures for concentration and at the end of the Second World War only thirty firms remained. Price control and technical change biased in favour of large plants progressively squeezed out smaller enterprises and by the mid-1970s the industry was effectively a duopoly. The liberalisation of licensing laws since that time has resulted in new entry, albeit of small and micro-breweries, which has led to greater product choice. Nevertheless, the industry today remains dominated by the two major market incumbents, Lion Nathan Ltd and DB Group Ltd. Together they brew around 350 million litres per annum, export beer to all quarters of the globe, and are part of a billion dollar industry.
