One step forward, two steps back

Some thoughts on the recent announcement of the ALH Group agreement with CUB and Lion Nathan

There had been rumblings in the beer industry for a few weeks but yesterday it was confirmed, reported by Australian Brews News,

“The Woolworth’s-owned ALH Group has sold its taps to CUB and Lion in unprecedented nationwide deals,”

Australian Brews News

The ALH Group (Australian Leisure and Hospitality Group) have more than 300 pubs across the country, in fact many of your favourite pubs might be an ALH venue – places like The Balmoral, Sail & Anchor, The Queens, Belgian Beer Café and The Vic just to name a few here in Perth.

So what does “sold its taps” mean? It means that CUB, aka Carlton United Beverages, and Lion Nathan have stuck a deal with the group to guarantee a certain number of taps in every single venue are pouring their beers. CUB and Lion Nathan represent the two “big boys” in beer in this country, kind of like Coles and Woolworth’s to put things in supermarket terms, and who are both in turn owned by foreign global corporations. Basically, the overwhelming majority of beer sold in ALH venues will belong to just these two suppliers.

You can read more in the article by James Atkinson at Australian Brews News here, it’s an interesting and good read so I won’t try and reword the details for you here.

An agreement like this is a big step backwards for the craft beer industry although the figures in the short term may not show it given brands in the CUB and Lion Nathan portfolio are counted in most craft beer data, brands like Little Creatures, White Rabbit, Matilda Bay and James Squire. Perhaps it would be more accurate to say that it’s a big step backwards for independent craft beer.

It is worth noting that this agreement between the ALH Group, CUB and Lion Nathan isn’t revolutionary. It’s a little unexpected but it’s certainly not a new practice. For as long as I’ve worked in the industry and long before, these types of agreements were pretty much stock standard. It has only been in the last few years that things have changed with a growing number of breweries popping up, more and more people getting a thirst for craft beer, and venues having more choice than ever when it comes to what beers are available. Having said this, many of these types of agreements still get signed today, they vary in their terms – some might call for the complete exclusion of all other suppliers and some might only apply to a single or a few taps. In short, the market for local craft brewers to get their beers served in bars and restaurants was already challenging but a nationwide agreement that impacts such a large number of pubs makes things a whole lot harder. Instead of climbing a mountain, local craft brewers are now climbing it with a bag full of house bricks on their back whilst the other guys get a nice helicopter ride to take them to the top.

It’s all a little unexpected because, and this isn’t based on a statistic but simply my opinion from working in the industry, there are many places who choose not to sign these sorts of deals, at least not with this level of overwhelming majority. They want freedom to get whatever beers they want from whoever they want, they want to make sure there’s something new on for their regular customers rather than them seeing the same beers over and over again with no change. Food menus are seasonal, wine lists often are too, beers can be the same. These moments are great, it’s recognition of our growing industry and of how much great beer there is to choose from. But every now and again a pub or bar will re-sign another agreement with a big corporate or maybe two. One step forward, two steps back.

Dominion League in Northbridge with a rotational tap list

You might now be thinking that some of these agreements sound anticompetitive and you’re not alone. In fact, there’s an investigation happening now by the ACCC, the Australian Competition and Consumer Commission, looking into beer tap contracts and it’s an investigation that has been going for some time with the results still not determined.

Read: Sydney Morning Herald – Beer battle ‘priority’ as ACCC puts heat on Lion, Carlton United over beer tap deals

Read: Australian Brews News – Tap Contracts Probe Ongoing

As far as I know, and this is just going off what I’ve read and what I’ve heard, the agreement isn’t 100% exclusive so it’s not to say there won’t be any independent craft beer in any of these venues but it absolutely will mean there will be less of them in many, many venues. It also means that, in pubs where one or a few independent craft beer taps remain, it’s very likely that beers from the two major suppliers will be placed in the most premium tap locations. Whilst that may sound like it’s not a big deal it’s basically the same reason why grocery stores put the non-supermarket brand milk on the bottom shelf and why Coca-Cola occupies the first few bays in the soft drink aisle, because where you put stuff strongly influences the things people buy.

Will news of this make it into the major newspapers? I’m not sure. I think it should. I don’t read a lot of news or watch it on the TV, I tend to rely on podcasts for news, but even so I still caught wind of the uproar around supermarket brand milk and the pressure it puts on dairy farmers and the industry as a whole. A Google search of ‘supermarket branded milk’ reveals a lot of articles around the subject, suggested searches reflect people’s anger and disappointment. Google ‘beer tap contracts’ and you’ll find some articles on the ACCC investigation, maybe a discussion thread on a bartender forum that’s about it. I’m not saying people should be making large signs with clever slogans and taking to the streets in protest (maybe some kind of Trump protest inspired “Not Our Beer”?!) What I am saying is that I believe people would care if they knew their choices were being radically reduced.

Dutch Trading Co, Victoria Park with 18 taps of rotating craft beer

Another notable factor is branding and marketing. Though we are talking about an agreement between one group and two suppliers, there are many, many brands that exist under each supplier. This can make it difficult to know whether the beer you’re drinking is independent craft beer or owned by a foreign corporation. Unlike eggs which are clearly marked as being ‘cage’ or ‘free range’, and although even this isn’t so cut and dry sometimes, there is a quick way for us as consumers to make decision on what we want to support.

I think that’s the key word here – decision. I have heard people comment that they don’t think people really care where their beer comes from and whilst that will most certainly be the case for some, I think there should be clear information that allows people to make the decision for themselves. Right now, things are kinda murky.

Earlier this year Australian independent brewery Bridge Road Brewers announced a new campaign called ‘Respect(ing) the Craft’ aimed to create simple identifiers for people to “differentiate their products from those owned by multinationals,” said founder Ben Kaus in an Australian Brews News article you can find here.

Source: Australian Brews News

I understand that not everyone cares about where their beer comes from or who owns it, and that’s fine, but for those who do care, the information should be more easily available. If you want to check where your beer comes from, have a read over the back label. There’s also a recently updated infographic from the Craft Beer Reviewer Australia shows you which beer brands are owned by the large/global corporations. If you want to see it you can find it here. Communicating to drinkers about what it means to be a local craft brewer should probably be at the top of every brewers mind.

As I mentioned earlier, to the best of my knowledge, the agreement in question isn’t a blanket, 100% across the board thing. Mitch Panting, venue manager at Fremantle’s iconic Sail & Anchor jumped into Facebook group Perth Beer Snobs to tell drinkers what to expect from his pub,

“The Sail and Anchor Pub has fought/pushed for every independent tap. We’re proud of the support we give local brewers, and we won’t waiver from that. We plan to continue to stand by local legends IN8, Nail, Mash, 3 Rivers, Gage, Artisan, Eagle Bay, Feral among others and look forward to demonstrating the market that these brewers share with their excellent product.”

The Balmoral is also keeping many of its local craft beer taps and from what I saw of the Belgian Beer Café this week they also managed to keep a few craft taps too. These are just my observations of course, it will be a matter of going into these venues over the coming weeks and seeing what changes take place.

There are some passionate craft beer people who have worked hard in their respective ALH pubs to show that craft beer isn’t a hipster trend that will wilt like an old kale leaf, it does put good money into the till, it can be very good for business. For these guys, yesterdays decision will be as disappointing to them as it is to us, perhaps even more so.

Mash Brewing Tenth Birthday event at The Queens

The short version is that this agreement is not good news for local craft beer.

I see more and more bottle shops increasing their independent craft beer offering, stores that I would have never imagined eight years ago would be selling any craft beer at all now have Garage Project White Mischief Gose today, a sour beer infused with white peaches.

This sort of thing makes me super happy but these beers need to be available on tap together with availability in bottle shops in order for craft breweries to succeed.

Having venues like those in the ALH group to support local craft beer, who’s customers aren’t all beer geeks, is important for craft beer to grow. You can’t know you want to drink craft beer until you get introduced to it and some of these venues did just that. Now there’s less of them it just got a little harder for local craft to find its way to new customers.

It is so important for all of us to keep supporting craft, to buy it and, more importantly, to ask for it when you’re out whether it’s at the pub, small bar, restaurant or at your local bottle shop. Show managers and owners that it is what you want and support it when you see it.

Caboose, Mt Lawley with 12 taps uncontracted to any suppliers


One thought on “One step forward, two steps back”

  1. This isn’t new… CUB and Lion have had the monoply on the number of taps and well as tap location at ALH pubs for years… They also have the contract for the wine lists which is why there is no good local wines in any of the Perth ALH venues. They also set the pricing structure based on the pubs location… ie if you are the queens you are a teir 1 pub and your pints of creatures are $14. Then a place like lakers is a teir 3 pub and their price for creatures is 12 (for example only, these arent the actual prices) Even though they are on the same contract and pay the same price for kegs. Rubbish

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