E-Malt.com News article: Australia: Australia's breweries hang on, as craft beer industry issues come to a head

At the recent Great Australian Beer Spectacular (GABS) in Melbourne, there were a series of accidental but unfortunate metaphors on show, ABC reported on June 29.

In one booth, a high metal bar had been erected to see who could cling onto it the longest (or 'dead hang').

Nearby, precariously balanced beer glasses were set up for a game called 'Knock 'em Over.'

A few metres down, a brewery who had recently been knocked into voluntary administration and was now hanging on out the other side, tried to put on a brave face.

"It's been a hell of a moment," said Brendon Guild from Bad Shepherd Brewing.

The brewery's story was hardly an isolated one, even within the festival itself.

"When I got here at nine this morning to get things set up, I walked around to have a look at who was here," said Mr Guild.

"There's a lot of breweries that I'm used to seeing who aren't here."

The past year has seen the problems bubbling beneath the surface in the craft beer industry spill over into public view.

News of voluntary administrations or independent brewery closures have become alarmingly regular (only this week, Melbourne's Alchemy Brewing announced it would be closing for good).

"The vibe is pretty down," said Laura Gray from Bright Brewery, standing in front of a large inflatable igloo.

"People really are doing it tough and it's no longer just one or two [breweries], it's really widespread.

"Each week, there's more bad news coming out of the industry and it's getting to a point where it's businesses and breweries you love, so it is starting to impact everybody."

With that as a backdrop, the festival became an inadvertent staging point for some of the intersecting issues facing the craft industry.

Like small businesses around the country, independent brewers are facing higher costs at almost every point in their operations and a customer base less able or willing to pay more for a non-essential product.

"We've got cost pressures and we've got selling pressures as well," said Callum Reeves from Kaiju! Beer.

"We're getting squeezed at both ends."

During the worst of the pandemic, breweries were given relief on paying alcohol excise.

The industry lobbied for that to continue in some form while brewers found their footing in a new economic climate, but the recent federal budget offered little support.

"We were told that our calls for help were being heard, we were granted the opportunity to inform many Members of Parliament about the challenges in the Australian beer market and provided them easy to implement and cost-effective solutions," said the CEO of the Independent Brewers Association, Kylie Lethbridge, in a budget response.

"We are very disappointed the federal government did not see fit to use its power to help."

Japanese brewers Asahi and Kirin, who own Carlton & United Breweries and Lion respectively, continue to loom large over the local craft scene.

Their market dominance extends from pub tap contracts to retail spaces, and Asahi owned-brands Balter and Mountain Goat had large stalls at the GABS festival.

There were also a few glares and grumbles in the direction of the Tinnies booth, a "modern craft beer" with independent brewery aesthetics, owned by supermarket Coles.

Independent brewers, like a host of other consumer goods, now find themselves vying for shelf-space against the supermarkets' own home-brand products.

It's an increasingly unwelcome dynamic, though one some brewers at GABS were unwilling to discuss publicly for fear of affecting their retail agreements. Others were more forthcoming.

"The supermarkets make a hell of a lot of beer that pretends to be craft," said Mr Guild.

"We're used to fighting against the big boys, like Lion and Asahi. Now we're fighting against the retailers as well. It's really tough to know who you're buying from."

It makes for a difficult moment for an industry that prides itself as a place of fun, communal adventure.

The Independent Brewers Association was forced to cancel this year's Good Beer Week, a staple on the craft beer calendar, warning "the Australian independent beer industry is at risk."

"The conditions are really kind of sucking the fun out of what we do," said Mr Guild.

"GABS is kind of that one thing we've got clinging to at the minute and we need to hold on to those things that help us celebrate the industry."

The situation is by no means all doom and gloom.

There are still over 600 independent breweries in Australia.

While many inside the industry expect that figure to fall in the coming years, the 15,000 or so people who attended Sydney, Brisbane and Melbourne legs of GABS point to an enduring, dedicated craft beer crowd.

Breweries like Bad Shepherd, Bright Brewery or Footscray's Hop Nation say consumers are still turning up to their venues in healthy numbers, they just might not be spending as much while there, or buying as many takeaway beers on their way out.

For Hop Nation, the past two years have served to prompt some hard business decisions.

They have scaled back their wholesale distribution network and have a renewed focus on their local market.

"Things are a bit tougher at the moment and there will be some more casualties, but it's not all dire," said the brewery's co-founder Sam Hambour.

"It's not like it was, but there's still a great industry and there's a lot of people out there wanting a good beer."


29 June, 2024