Australia: AB InBev buys Australian craft brewer Pirate Life

The world's biggest beer company, Anheuser-Busch InBev, has continued its acquisition spree of smaller craft brewers in Australia, this time snapping up the Pirate Life operations in Adelaide, The Financial Review reported on November 30.

It comes just two months after AB InBev bought Sydney craft beer company 4 Pines, as the global giant accelerates in a craft beer sector that is growing much faster than the stagnant mainstream beer industry.

AB InBev already owns the Carlton & United Breweries business in Australia that makes Victoria Bitter and Carlton Draught.

AB InBev's president of Asia Pacific South, Jan Craps, said on November 30 that the company would also inject A$10 million into Pirate Life for a new brewery for the brand because it had outgrown its facilities in the inner western suburb of Hindmarsh in Adelaide.

"With its focus on canned packaging that gives consumers fresh, well-crafted beers and consistent quality, Pirate Life has resonated with Australian beer drinkers who want something different," Mr Craps said.

The purchase price was undisclosed. Pirate Life produces about 3 million litres of beer annually, and when the new brewery is up and running that will accelerate to about 8 million litres.

Pirate Life was founded in 2014 by Jack Cameron and Jared Proudfoot. Mr Proudfoot said the buy-out would enable the business to upgrade to a new, bigger brewery.

"The reality is we have run out of capacity at Hindmarsh," Mr Proudfoot said.

The September acquisition of 4 Pines triggered the removal of that company from a 450-member Craft Beer Industry Association in Australia which earlier this year voted to exclude all the big brewers and their craft beer brands from being part of the organisation. Pirate Life is expected to meet with similar treatment.

The big players, who have been progressively buying up craft beer brands, were deemed to have too much of a leg-up because of big balance sheets and not sharing the same ethos as the entrepreneurs trying to build their businesses from the ground up.

AB InBev became the owner of CUB last year when it undertook a global merger with SABMiller, which in late 2011 cemented a A$12 billion takeover of Foster's Group, the long-time owner of CUB. CUB is the No.1 beer company in Australia, with a market share of about 46 per cent, ahead of big rival Lion, which has 42 per cent.

4 Pines was established in 2008 by the Mitchell family. The craft beer industry in Australia is worth an estimated A$740 million annually and is growing at between 15 per cent to 20 per cent per annum outstripping mainstream beer sales, which are going backwards, presenting big headaches for CUB and Lion.

30 November, 2017