James Boag's Brewery to Cease Production in Tasmania

Iconic northern Tasmanian brewer James Boag has announced it will cease production in the state by November.

Parent company Lion Australia had previously shifted production to the mainland for Boag's products sold in those states, but kept brewing in Tasmania for local supply.

"Long-term decline in the national beer market has caused the brewery to run significantly under capacity for many years — it is currently operating at about a fifth of its capacity," the company said in a statement.

The brewery first opened in Launceston in 1881.

Launceston Mayor Matthew Garwood said the brand's departure from the city after 145 years was a "real kick in the guts".

"It is very much aligned to Launceston and very much aligned to Tasmania."

Mr Garwood said he felt for the impacted workers, describing Lion's decision as a "blow to the Launceston and Tasmanian economies".

Tasmania will get its Boag's from the mainland

Lion chief executive and managing director Anubha Sahasrabuddhe said consultations were now underway with the company's 42 Launceston employees.

She said redevelopment opportunities would be explored.

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"The James Boag's brand will continue to be brewed in other world-class breweries in Lion's network in line with stringent quality standards," Ms Sahasrabuddhe said.

She said the newly redeveloped Boag's Brewhouse in Launceston would continue to operate and mainland-brewed Boag's beer would be offered in Tasmania.

The brewer also announced it would repay a $1 million Tasmanian government loan given in 2023 to help keep the Launceston brewery visitor centre and tours open.

Government had been 'strong supporter' of brewery

Tasmanian Premier Jeremy Rockliff said the government was "extremely disappointed" with Lion's decision.

In a statement, he said the government had been a "strong supporter of the business over a number of years".

"Our immediate priority is the wellbeing of the workforce," Mr Rockliff said.

"We will engage closely with Lion, the union, workers and the hospitality industry to support those impacted."

Federal Labor MP for Bass Jess Teesdale said she expected Lion to "honour all entitlements" for impacted workers.

"Retrenched workers will have access to supports offered through the Department of Employment and Workplace Relations to assist in finding new employment as quickly as possible," she said.

'Difficult news' for Launceston

Launceston Chamber of Commerce chief executive Alina Bain told ABC Mornings the news was "devastating" for Tasmania's north.

"It's really difficult news, and we're just processing it now."

She said that market conditions for beer had "been in decline".

"And then of course, increasing costs are causing difficulty," Ms Bain said.

She said it would be "incredibly challenging" for the 42 local employees.