Lion to cease brewing at Boag’s in Tasmania

Australia | A trainwreck that was waiting to happen: Lion will cease production at the James Boag brewery in Launceston, Tasmania, from November, the Kirin-owned company announced on 2 June. In a statement, Lion said the brewery (with an estimated capacity of 900,000 hl beer per year) had been underutilised for many years, running at about 20 percent of potential output, following declining sales. The closure is set to impact the roles of 42 people.

Boag's history in Launceston stretches back to 1881 and the founding of the Esk Brewery. James Boag acquired the brewery and formed J Boags & Son in 1883. In 2000, the San Miguel Corporation from the Philippines bought the previously publicly listed firm for AUD 92 million, which traded heavily on the clean, green, Tasmanian made image.

In 2007, San Miguel decided to shift its focus back to its domestic market and Boag’s was sold to Lion for AUD 325 million (then USD 270 million). One year later, Lion became a fully-owned subsidiary of Japan’s Kirin Holdings.

After major expansions, Boag’s was making its own beers and key Lion products including XXXX Gold and then transporting them across the Bass Strait. However, free capacity in other Lion breweries on the mainland and increasing sea transport charges made this uneconomic.

Stripping out overcapacities

According to media, in 2024, Lion moved the bulk of Boag’s production to its breweries in Sydney and Brisbane, leaving the Launceston site to supply the Tasmanian market only.

Due to overcapacity in the group, in 2013 already, Lion closed the Swan brewery in Perth, Western Australia. In 2021, it shuttered the West End Brewery in Adelaide, whose peak output was 2 million hl in the 1980s. The move led to nearly 100 redundancies. Now it is Boag’s turn.

Observers worry that Boag’s closure could have a negative effect on its local supply chain, foremost Boortmalt’s malt house at Devonport, Tasmania, which Boortmalt acquired in 2019 as part of its takeover of Joe White Malting. The plant is capable of making around 12,000 tonnes of malt per year. It used to supply Boag’s and the Cascade brewery (owned by Asahi) as well as local craft whisky distillers and brewers. Its viability could now be in jeopardy.