OOne of Australia’s largest independent brewers, Fermentum, parent company of Stone and Wood, Two Birds and Fixation, was acquired by multinational Lion last week. It draws attention to the wasteland of the industry, where small locally owned brewers face off against foreign-funded giants, while consumers are sometimes unable to tell the difference.
Fermentum is the latest in a growing list of independent breweries that have sold to one of the two main alcoholic beverage companies operating in Australia: Lion, a subsidiary of Mitsubishi through Kirin Holdings Company, and Carlton United Breweries ( CUB), which, despite being headquartered in Melbourne, was acquired by the world’s largest brewer AB InBev in 2011, and sold back to Asahi in 2020 for $ 16 billion.
Although Australian beer consumption per capita has fallen 20% over the past decade, craft beer continues to grow, especially over the past three to four years, according to the managing director of the Independent Brewers Association, Kylie Lethbridge.
Australia is currently home to around 625 independent breweries – classified as such due to their relatively small operations and a minimum of 80% Australian ownership. Two-thirds of these breweries are located in regional areas.
Writer and beer critic Luke Robertson likens Australia’s attachment to beer to sports fandom. He says Australians increasingly identify with the people behind beer – as much as with the discovery of new flavors – which leaves some consumers disillusioned when their favorite beer changes hands.
“A lot of these brands reflect the personality traits of people, whether it’s a certain love of music or pop culture… the locality is huge,” he says.
After the first major sale of its kind – Little Creatures to Lion – in 2012, the formerly independent companies Mountain Goat, Pirate Life, 4 Pines, Balter and Feral Brewing were also acquired, while the bottle stores of top brands are now creating their own. own beers to tap into the craft market.
“The increase in the number of these large companies producing their own crafts is to me an indication that they are seeing an increase in demand for a different style and quality of beer,” says Lethbridge.
“They are doing theirs to try to compete with the independents. And if they don’t make theirs, they acquire other brands to compete for storage space.
Independent brewers produce only 8% of the total beer volume in Australia, but the Independent Brewers Association estimates they employ half of the industry’s workforce.
Together, CUB and Lion have an 80% market share in Australia, which small brewers say leaves little room in the fridge.
“We’re not competing with CUB and Lion,” says Mazen Hajjar, founder of independent Melbourne label Hawkers Beer.
“There is a false assumption that we are in the same market as Lion and CUB. We make beer, yes, but they make a series [beer]. It’s like saying that a good restaurant rivals McDonald’s. They both make food, but they’re not necessarily competing against each other.
In Australia, unlike parts of Europe or the United States, small brewers claim that it is virtually impossible to get their product into a large pub, club, hotel, sports stadium or casino in Australia. because of the taps contracts with the big brewers, which oblige the place to allocate a certain percentage. from their beer menu to company brands.
In 2014, the Australian Competition and Consumer Commission launched an investigation into allegations of anti-competitive behavior by large beverage companies, with independent brewers claiming they were excluded from the taps due to exclusivity clauses of more than 80% and volume requirements, in exchange for discounts. , investments in infrastructure and loans for site renovation.
In 2017, after reviewing the valve contracts at 36 sites in Victoria and NSW, the ACCC found that the impact was “unlikely to significantly reduce competition”. The Independent Brewers Association said the conclusion was a “blow”, saying tap contracts restricted the ability of independent brewers to grow.
“[Big companies] are using all of these brands to capture another market share of a segment that is not theirs, and they are using them as another placeholder on the tap to keep brewers out, ”Hajjar said.
Large brand portfolios mean that in stores, major players can offer marketed options to drinkers who want to buy small, local products – something Lethbridge says most independent brands have always been proud of and sport their packaging.
Supermarkets are also expanding their ranges of craft beers, while integrating vertically. Coles has added more than 100 craft beers to its shelves in the past 12 months. Some are from small breweries, others are owned by conglomerates and a few are “private label” brands owned by Coles.
Endeavor Group – which includes Dan Murphy’s, BWS and the ALH Group pub chain in its portfolio, has also rapidly expanded its private label portfolio in recent years.
Much like independent beers, private label cans have unique designs in a rainbow of colors to capture the imaginations of different drinkers, whether they are addicted to a surf motif, bold or minimalist.
“It’s designed specifically for this store and to target a market,” says Robertson. “They are based on this same brand proposition.
“I think a lot of the market sees them as a bit fake or a bit misleading,” he says. “But that certainly doesn’t mean they taste bad at all.” Private label brands have even performed well in beer prices.
Robertson says the price and affordability of supermarket’s own labels influences some craft-oriented consumers, but for others, any mass-produced beer is just less exciting.
“They will be more conservative when they release products [to] an intrinsically mainstream audience… whereas a small brewer could create a unique piece for their local auction house or their own bar… so that they could be a little more experimental, more creative.
“Without independent brewers, you couldn’t put some of these products at Liquorland or Dan Murphy’s which are now made by Dan Murphy’s.”
When he talks about the attachment of some beer consumers to brands, he says that “Stone and Wood is a very good example”.
“They have spent the last 10 years really building their brand on independence and making very clear statements about what their independence means to them and how it relates to their brand and their philosophy and when it is taken away from you. as a consumer who has bought into that, all of a sudden, you feel like you’ve been lied to.
Stone and Wood founder Jamie Cook, also a former president of the Independent Brewers Association, said their brand has always been based more on a “conscious business model” than independence. “We wanted to find a custodian who would pursue these obligations and commitments to the community, and Lion stepped in and provided that,” he told Brews News. “Ultimately, when the founders decide they want to pass custody… we do.”
Lion Australia Managing Director James Brindley said: “We want to build on what they started, giving their employees and their beers even more reach across the country.”
With a burst of color and diversity beyond the heirloom logos familiar at many bottle stores, and the big brands following the pattern that independents have spent years forging, ultimately Lethbridge says the only way to know if a beer is owned by an independent is to ask.
“I encourage people to look for this certified independent seal on the packaging, it’s pretty easy to spot… or just ask your local pub, bottle store or auction house.”