Australia's long-term beer decline hits home as Lion plans to close Boag's brewery in Launceston

Australia's decades-long decline in beer consumption has claimed one of the country's most storied brewing operations, with Japanese drinks giant Kirin Holdings' subsidiary Lion planning to close the James Boag's Brewery in Launceston by the end of this year, putting 42 jobs at risk.

The brewery, which has operated continuously for 145 years, is now running at one-fifth of its capacity after persistent falls in national beer volumes hollowed out production.

Lion, which acquired the Boag's brand in 2007 for $325 million, says the closure proposal follows years of attempts to sustain the site in the face of a shrinking market.

It's been a similar story also for craft breweries, several of which have collapsed in recent years due to rising costs and alcohol tax hikes.

Beer consumption in Australia more broadly has plunged dramatically since the 1970s when it peaked at 190 litres per capital annually to around 73.5 litres just two years ago.

Lion initially acquired the business as part of a push into premium beer, with the company at the time pointing out that Tasmania's provenance was "central to the Boag's Draught brand identity".

The decision to close the Launcestion brewery comes just a few weeks after James Boag’s St George was named Best Australian Style Lager at the 2026 Melbourne Royal Australian International Beer Awards.

Boag's Launceston brewery traces its roots to 1881 and it has been a cornerstone of the northern Tasmanian economy for more than a century, but the writing has been on the wall for the better part of a decade.

In 2016, Lion cut 39 roles at the brewery and shifted 20 million litres of annual production to mainland facilities in what was then described as a reconfiguration rather than a wind-down.

At the time, the brewery still produced about 36 million litres annually, but volumes have since fallen dramatically, leaving the site operating well below economic scale.

Lion CEO Anubha Sahasrabuddhe says the decision to cease Launceston beer production has been driven purely by declining volumes and rising costs, adding that it does not reflect on the capability of the workforce.

“We know this is difficult news for our Boag’s Brewery team and the broader Launceston community," says Sahasrabuddhe.

"I sincerely apologise for the negative impact this announcement will cause.

“This proposal is no reflection on the incredible capability, passion and commitment of our brewery team members, and the many more who have come before them, who have worked hard to operate the brewery as efficiently as possible despite decreasing volumes.”

As part of the closure proposal, Lion will offer a $500,000 reskilling fund for affected workers and establish a $500,000 community fund to be distributed over five years.

Lion also says it will honour all employee entitlements, including redundancy payments to those team members impacted by this proposal who are unable to be redeployed.

The Boag's brand will continue to be brewed at Lion's other Australian facilities, and the Boag Centre for Beer in Launceston, a tourism and hospitality venue, will remain open.

The proposal marks the end of an era for a brand whose identity has been deeply entwined with Tasmanian provenance.

When the 2016 restructure was announced, then Lion managing director James Brindley cast the changes as a positive step, saying the company was reconfiguring its supply chain to create a "more sustainable and competitive" operation.

That reconfiguration bought time but ultimately could not arrest the volume decline.

Tasmanian Premier Jeremy Rockliff says he is "extremely disappointed" by the decision as the state government has been a "strong supporter of the business over a number of years".

Rockliff has confirmed that a $1 million Tasmanian Government grant previously provided to Lion will be returned and reinvested in the local community.

Lion says it will work "closely and carefully" with the City of Launceston and Tasmanian Government on the future of the brewery site to ensure it plays its in preserving the building's heritage while "revitalising it for future generations".

Lion plans to enter a formal consultation process with affected employees over the coming weeks, with the proposed closure timeline set for November this year.