Does your KiwiSaver contain alcohol?

5th Sept. 2021

The contents of your wine bottle may be banned from your KiwiSaver account, if you are invested in an ethical fund.

This article originally featured on Stuff and was written by Daniel Smith. 

The contents of your wine bottle may be banned from your KiwiSaver account, if you are invested in an ethical fund.

You might be familiar with the idea that some funds exclude things like cluster ammunitions. But there are 90 KiwiSaver funds that exclude any investment in alcohol.

While very few Kiwis own controversial weapons or abuse human rights, four out of five adults regularly drink alcohol. That might make this exclusion harder to understand.

Nicki Jackson​, director of Alcohol Health Watch​ said this was because alcohol was not an ordinary commodity.

“In New Zealand alcohol is predominately sold by multi-national companies. These are corporations who cost many New Zealanders their quality of life,” Jackson​ said.

According to Jackson​, investing in a liquor company is far worse than just buying a drink.

“If you are increasing the funding available to alcohol companies, they use that money for PR, lobbying, marketing, and preventing legislation. The money that is going to these companies is directly being used for harm,” Jackson​ said.

But currently KiwiSaver funds who ban alcohol are in the minority.

Data from Mindful Money shows that 230 out of 320 KiwiSaver fund had invested in alcohol companies.

Alcohol investment in KiwiSaver had increased by 10 per cent over the past year.

Barry Coates​, founder of Mindful Money, said the problem with alcohol was the way it affected the most vulnerable elements of society.

Coates pointed to companies that pushed sugary alco-pops on to young people and targeted low income communities as evidence of the distinction between alcohol companies, and the drug itself.

“For these reasons you can say while I don’t mind a drink of wine, I don’t like what the industry does in causing absolutely massive social costs, public health costs and harsh consequences for vulnerable people,” Coates​ said.

John Berry​, fund manager of ethical KiwiSaver fund Pathfinder, also believes in the separation of personal use and investment when it comes to alcohol.

Pathfinder initially screened alcohol companies based on their corporate behaviour, while maintaining investments in certain companies that fit with their values.

But after researching the way the liquor industry lobbied against international law, Berry​ decided to exclude the entire sector.

“The reality is alcohol does cause a lot of harm in our society, even though it is widely and responsibly used. The harm aspect to alcohol needs to be considered when making investment decisions,” Berry​ said.

Despite having chosen not to invest in alcohol, Berry​ does enjoy the odd glass of wine, a distinction he sees less as a contradiction and more as a hope for the future.

“The way I approach investing is I invest for the world I want not the world I have. I want a world where alcohol isn't sold to vulnerable people, isn’t marketed in a way that appeals to young people. But we don’t yet have that world,” Berry​ said.

Bridget Macdonald​ is the executive director at the New Zealand Alcoholic Beverages Council, a lobby group that represents Lion, Pernod Ricard, Spirits NZ, Asahi and other major alcohol manufacturers.

Macdonald​ said she could not understand why some KiwiSaver fund managers would remove the alcohol industry as an investment option.

“Our wineries, distilleries and breweries underpin a $2.09 billion export market, employ tens of thousands of Kiwis in all regions of New Zealand, and purchase the goods and services from thousands of businesses across our country, from local growers to national transporters,” Macdonald​ said.

“It is unfortunate that a socially acceptable, fully regulated local product is excluded by some fund managers.”

For Jackson​, making alcohol exclusion a normal part of KiwiSaver wasa key way the country could fight against global companies causing harm.

“It is important that we target the multinational companies. They are powerful, they are preventing legislation, and they should be our target if we want to see change in this industry.”