Australia: Carlton & United Breweries offering pubs and bars forced to shut down in Melbourne extended credit for two months

Asahi's newly acquired Carlton & United Breweries beer business is offering pubs and bars forced to shut down in Melbourne extended credit for two months as the beer giant endures a new hit to sales in its home base heartland, The Australian Financial Review reported on July 15.

Arch-rival Lion is also suffering a sharp sales slump in Melbourne.

CUB chief executive Peter Filipovic on July 15 sent a letter to pubs and bars saying "approved customers who purchased draught beer in areas under lockdown will be provided 8 weeks of extended credit''.

But CUB has stopped short this time of providing a keg return service, unlike the first national lockdown in late March in which it provided refunds for 100,000 kegs.

Mr Filipovic also advised that CUB would match rival Lion in absorbing the government-mandated August 1 increase in CPI-linked excise which normally lifts beer prices twice-yearly. "This price freeze applies to all our Australian customers,'' he said.

Lion earlier this week told hospitality industry customers there would be "no changes to our list prices for pack and draught beer and cider for the remainder of the year”.

Both of the big beer companies have been partially buoyed by rising sales in Queensland, with that state's economy steadily regaining momentum as restrictions loosen and more tourists arrive.

Asahi became the owner of CUB in June after a A$16 billion buyout which delivered brands including Victoria Bitter, Carlton Draught, Crown Lager and Great Northern into its stable.

Both brewers are hoping the Melbourne lockdown will only last for the six-week period outlined by Premier Daniel Andrews, and that further restrictions are not required elsewhere in Australia. NSW earlier this week tightened some pub rules by limiting the number of patrons in larger venues to 300 and cutting back the size of group bookings from 20 to 10.

The nationwide lockdowns imposed in late March by the federal government triggered a slump in beer volumes at CUB of around 30 to 35 per cent in April, with packaged beer sales at liquor retailers unable to offset the heavy slide in on-tap beer.

Publican Dave Canny, owner of the Montague Hotel in South Melbourne, said on Wednesday the shutdowns were hurting and takeaway sales pursued by some venues had only a small effect on the weekly losses from the renewed shutdowns.

The suddenness of the stage three restrictions imposed from midnight on July 8 had caught many operators off guard. "We didn't see it coming that's for sure,'' he said. Many operators had been starting to prepare for an expansion, he said.

Lion, which makes Tooheys, XXXX Gold, West End and James Boag's Premium Lager, said the group was working closely with each pub in Melbourne to try and minimise the hit.

"We appreciate this is an extremely difficult time for many venues in Victoria, and we will be working with them to manage individual requests on a case-by-case basis,'' a Lion spokeswoman said.

Lion, which last month was hit by a cyber attack which disrupted production after IT systems were affected, has been experiencing a solid rise in demand in Queensland where production has been steadily being ramped up at the group's XXXX brewery at Milton in Brisbane.

"In Queensland, we are starting to see a return to normal demand levels, and we look forward to seeing the beer continue to flow across the state,'' she said.

Mr Canny said the industry is hoping the Melbourne lockdown will only last six weeks. "We're trying to stay as optimistic as possible.''

13 July, 2020