A Sydney brewery that has been offering publicans kegs of beer for $120 – understood to be 50 per cent cheaper than current average prices – says it is responding to “market forces”.

Redoak Brewery has recently emailed (below) Sydney publicans offering them a “special offer” of “a very compelling price well below the market price from big brewers for a keg of real craft beer at$120/keg plus GST and delivery.” (emphasis from original).

The $120 deal is offered on the brewery’s Aussie Pale Ale and Aussie Lager and is offered as the brewery wants “to get sales volume and know that we have to make it a good deal to get you, the Publican, across the line.”

Contacted by Brews News to confirm the offer, General Manager Janet Hollyoak confirmed the offer by email.

“Yes, Redoak is providing a special offer of $120 plus GST for 50 litre kegs of our Aussie Pale Ale and Aussie Lager in metro Sydney.”

“Our Aussie Lager won Champion Draught Beer in 2016 and was a finalist in the Presidents Medal 2017 at Sydney Royal Show.

“We brew great beers and are Australia’s most awarded brewery, so this is our way of trying to let all Australians have the chance to taste it. With an Australian style ale and lager, we are also targeting the Australian palate and their thirst for real craft beer.

“It’s a deal to make publicans want to take on new beers. We have spent 15 years planning and working to get where we are today. We are aiming to get massive penetration into the draught market with this offer. There is no end date at the moment. If we can get enough publicans to free up taps out of contracts and we get enough support for the offer, we will keep the offer going.

“Breweries usually provide a list price, but then there are rebates, incentives, complimentary tickets, promotional materials, collateral, sponsorship deals, beer tap infrastructure and venue refurbs provided etc. So, what actually is the market keg price? We believe we are simply offering an attractive and alternative offer to publicans for two popular beer styles on tap in Australia.

“We are not targeting craft rotational taps of one keg at a time. We are targeting permanent taps and volume.

“The ACCC has recently handed down its decision and said that the beer industry in Australia is a fair and competitive market. So, we are simply offering what we believe is a competitive and compelling offer to venues.

“We are responding to market forces enabling publicans to offer world-class real craft beer to every Australian at affordable prices. Redoak wants to get our beer Australia wide and look forward to working with pubs and bars.

“Any enquiries can be directed toorders@redoak.com.au.”

Local publican Peter Anstey fromHotel Sweeneys, located close to Redoak’s Sydney Beer Cafe, said while promotional offers were quite common he was quite surprised at the price he was offered.

“I was surprised it was that brewery to be honest because they have never even approached me to buy kegs,” he said.

“I thought that’s a bit random, because we’re not all that far away and then all of the sudden the first point of contact is cheap kegs.”

“There are obviously relationships, we do get offered good prices offered across multi-venues as people are trying to get a foot in the door, but this was brand new. I have not actually seen their products on tap.”

Anstey said his venue supported local craft brewers and did regular tap takeovers, but did have contracts with large brewers. However if he was to take up the cheap keg offer, it would be at the expense of small brewers.

“I would have to take another craft brewer off,” he said.

Mazen Hajjar, owner of Melbourne’s Hawkers Beer, at first expressed surprise when asked to comment on the offer.

“Wow, that’s pretty sharp,” he noted before calculating that the excise on a 4.2% keg of beer would total $52.50 out of the $120 pricing.

While not being willing to comment on the long-term viability of such pricing without knowing the brewery’s costs, Hajjar did observe that he was all for transparency of pricing, in response to Redoak’s comment about rebates and actual pricing.

“I always prefer to compete with transparent pricing because with upfront pricing you know where you stand,” he said.

“With layers and layers of rebates it’s hard for the publican to know the pricing and for brewers to know how to compete.”

It is understood that Hawker’s own 5% ABV Pilsner wholesales for approximately $140 per keg more than Redoak’s offer.

Redoak has been an active voice against tap contracts and was instrumental in setting up the Australian Real Craft Beer Association, in opposition to the former Craft Beer Industry Association, now the Independent Brewers Association.

The Independent Brewers Association declined to comment for this story.

Redoak’s Offer

Hi ,

We thought you might like to know about a great special offer now available! Redoak is offering a very compelling price well below the market price from big brewers for a keg of real craft beer at $120/keg plus GST and delivery.

Why such a good offer, you may ask? There are no strings attached. We simply want to get sales volume and know that we have to make it a good deal to get you, the Publican, across the line.

DRAUGHT BEERS

Our wholesale draught beers available are both Australian style beers to appeal to a broad group of Australian beer drinkers.

• AUSSIE PALE ALE – An Australian pale ale, straw coloured beer which makes for easy drinking and loaded with taste. This is a great beer coming into the hotter months (4.2%)
  AUSSIE LAGER – An Australian style lager packed full of flavour, aroma and body. (4.2%) It won ‘Champion Draught Beer’ in Sydney Royal Beer Show 2016 and Finalist for Presidents Medal 2017

THE KEY BENEFITS

• With costs increasing and margins being squeezed in current economic environment, this deal offers you lower costs and more money direct to your bottom line.
• No hassle about rebates.
• Put the savings in your pocket to spend on your own marketing and promotion, etc. We will provide decals and digital artwork and logos, on request.
• Give your customers more choice with some Australian real craft beers
• Offer a locally brewed, high quality beer, from an esteemed Sydney brewery at affordable priceTHIS OFFER CAN WORK ALONGSIDE BIG BREWER CONTRACTS

This is a very competitive price in return for taps and sales volume. We know you have existing contracts with other breweries, but we believe there is considerable benefit and profit to be gained freeing up a few taps.

WHY REDOAK BEERS?

Redoak Brewery has been in business for over 13 years (since 2004). Redoak is a strong brand associated with high quality beer as Australia’s most awarded brewery with national and international awards. We are a local brewery passionate about brewing quality real craft beers.

KEY TERMS

Minimum order per delivery is 3 kegs, strictly 7 day payment terms, offer applies to Sydney metro venues only, at this stage. Redoak’s standard sale and supply terms apply.

If you want to discuss this offer further or have any questions, please contact me by email or mobile. I look forward to hearing from you shortly.

Regards,

David Hollyoak