Many New Zealand breweries are on edge as they prepare for the holiday production push thanks to a shortage of cans and – more importantly – lids.

Joe Wood, owner of Liberty Brewing and president of the Brewers Guild of New Zealand, said a number of different issues have combined to put the squeeze on brewers and he was personally affected by a shortage of lids, or ends as they are known.

“Ten days ago now – Friday last week – I got a phone call saying we can’t get lids,” Wood said.

“We were in a tough position. We were looking at shutting the brewery down as 70 per cent of what we make goes into cans and if you can’t get lids what are you going to do?”

Wood changed supplier from Orora and was able to secure ends from rival Visy. But that came with a huge cost.

“It meant we needed to get new tooling for the canning machine. The profiles of the lids are different and the seaming tooling we had only worked for Orora lids.

“The idea of changing lid suppliers was not something I wanted to consider – but I was forced into it. It took a week to change the machine over and we dumped about 40 dozen cans of beer getting it right.”

Chris Mills, at Kereru Brewing in Upper Hutt, is another hit hard on the lid shortage.

He produces his own beer as well as acting as a contract producer for a number of smaller brands.

Earlier this year he tried to order a pallet of around 250,000 lids – worth around $15,000 – with the intention of using most himself and on-selling the remainder to other small breweries who were struggling to get what they needed.

However, his deal with Orora meant he could only order ends to match bottoms he’d already been supplied with.

Not only did that affect the smaller breweries who were depending on that shipment, but it also hit his contract production.

“I’d been doing packaging for other brands using some of our ends while I waited for theirs to show up and that’s left us with a mismatch of supply for our cans and without a guarantee we will be able to get more, my ability to package Kereru products is now compromised.”

He said he has had to tell his customers, “I’m sorry, I want to help, but you’re going to have to make phone calls to source ends for your own products.”

The knock-on of delays has “thrown our production schedule into tailspin because I need to know I have the ends before I can start packaging”.

Mills says he’s been assured he will get the ends he’s entitled to as part of his supply agreement but he’s not holding his breath.

“Orora have made guarantees to supply what I need and I feel confident it will happen but anxiety comes in when people say ‘can ends are coming’ but I’ve yet to see them.

“I might have to cancel production runs for other people if the ends don’t show up.”

The lid problem in New Zealand is exacerbated by COVID-19 and industrial action in Sydney. While can bottoms are manufactured in New Zealand, lids have to come from Australia. According to Radio NZ, New Zealand’s main ports are all reporting delays and congestion.

However, Wood also understands that the two main can producers, Visy and Orora, are struggling to keep up with increased demand for can bottoms.

One reason is that breweries are ramping up production for the Christmas and New Year period off a higher than forecast base as the craft beer has grown faster than normal this year. If breweries haven’t adjusted their pre-ordering they will be caught short.

“If you didn’t get your forecasting right and if you haven’t pre-ordered to have them on site now, it’s too late,” Wood said.

Adding to the problem is the boom in hard seltzer and alcoholic soda, which is taking up production slots in factories. It means breweries reliant on normal lead times for ordering are finding themselves in a long queue.

“Breweries are getting caught out by the lead times – there just no production slots. In particular, it’s the 330ml can that’s in hot demand, due to new products on the market like seltzers or pre-mix, low-carb vodka-soda drinks,” Wood said.

“Both factories in New Zealand – Orora and Visy – are under the pump, cranking out that format. I’m told they are going 24 hours a day – there’s a lot of demand for cans.”

Wood understands breweries reliant on white “base coat” 440ml cans that they then label themselves are also being hard hit.

“The problem for Visy is that the machine they use to make base coat slows the plant down – so they’re not doing base coat right now. You can get a printed white paint can but the difference in the colour is noticeable.”

Wood believes the current shortage is “seasonal” and after the Christmas rush there might be some normality.

One possible solution for the can shortage is to revert to bottles but for a big supermarket player like Liberty, that’s impossible he said. That’s because supermarkets are not taking any new products into their systems, so even if he could change cans for bottles he wouldn’t be able to sell them.

“The supermarkets won’t be aware there’s a can situation – but in September they put a moratorium on NPD (new product development) so if we moved Yakima Monster from can to bottle, for instance, that would be considered NPD.

“We can’t say `sorry, we ran out of cans but we’ve got bottles’ – they’ll say that’s not what we agreed to.”

Visy and Orora have been approached for comment.

Orora’s Australian business was also asked about the issue, which has been prevalent in the US, especially after Ball Corp, the world’s largest manufacturer of metal beverage containers, announced in last month that it believed the US market would be short 10 billion cans in 2020 and that imports would continue into 2021.

Orora responded to these enquiries focusing on Australian supply last week, confirming it had experienced “healthy demand” for cans in recent years and that it had invested $8 million in small can format capabilities in Auckland, as well as acquiring a NSW tooling business.

However, it did not directly answer questions about whether there were any current or projected container shortages.

Any Australian brewers who have experienced can shortages get in touch by emailing clare@dev.brewsnews.com.au