The Prime Minister is defending the rise of the alcohol excise tax following an outcry from beer and winemakers.
It's set to rise by 6.5 percent, adding pressure on consumers and producers alike. That followed an increase of 6.9 percent last year.
The latest increase comes despite warnings from the industry the latest hike could spell the end of boutique breweries and wineries.
Hallertau Brewery owner Stephen Plowman told AM the hikes were "hugely damaging" to the industry.
"I think discretion should be used and judgment should be called into play to leave it [as is] this year," he said.
Kumeu River winemaker Paul Brajkovich said the industry couldn't just swallow the hikes.
"It means we keep increasingly having to put prices up," he told AM.
However, Prime Minister Chris Hipkins said the increase had happened every year since 1991.
"Ultimately, if the Government was going to decrease the levies in this space then we'd need to find that money from somewhere else so, yes, I understand - no one particularly likes to see the price of beer and wine going up but, like everything else within the economy, inflation is playing a role here."
He said the increase was "the nature of inflation - it's one of the reasons we've been very focused on getting inflation back down again".
Alcohol Action NZ, a lobby group, was happy with the hike.
"Although the circumstances are unfortunate, we actually see this as a really positive thing," said chair Sam McBride.
The increase comes into effect on July 1.
