Australian Beverage Industry Digest No. 118


Advertising caution The Advertising Standards Board (ASB) dismissed a complaint about Diageo’s Smirnoff, which centred on sexism, under-age drinking and obscene language. However, in handing down the ruling, the watchdog advised that industry codes applied not only to what a company was posting on its Facebook page but also to any user-generated comments that followed. A Diageo spokesperson stressed that the complaint relating to the Smirnoff Facebook page had been dismissed.

It is thought that the watchdog is also poised to uphold a complaint against Carlton & United Brewers over comments posted on the Victoria Bitter Facebook page. CUB said in a statement that, while it did not consider user comments to be advertising, ‘we acknowledge the decision of the ASB and support what is a clearly a robust process’. The brewer said it has revisited its guidelines. [From The Shout, Aug 6, 2012]

Easier licences? SA’s State Government has introduced a ‘one-stop shop’ for applications for liquor licences. Under the new system, the Planning Dept will case manage applications, liaising with other authorities such as Adelaide City Council and SA Police and thus saving applicants many thousands of dollars and time. The new approach is designed to help entrepreneurs navigate the system and to facilitate the opening of new venues and possibly encourage the establishment of small ‘lane-way’ bars. [From Adelaide Sunday Mail, Jul 22, 2012] Perhaps, a strange move in view of the current seemingly rising tide of opposition to easier availability of alcohol… and the stated aim of SA’s new police chief to ‘crack down on alcohol-fuelled violence in venues such as Hindley Street’ in Adelaide’s CBD.

Hotel industry changes Sources have verified reports that Metcash plans to acquire pubs to complement its liquor supply business. Pub real estate agent Ray White is believed to be acting on behalf of Metcash in its search for multiple assets over the coming months. Metcash is believed to favour partnership arrangements for venues under which it would acquire shares of the leaseholds. The collateral bonus of the partnerships would be the ongoing supply of liquor, through the company’s wholesaler ALM, one of the largest liquor suppliers in the country. Woolworths majority-owned Australian Leisure & Hospitality (ALH), Goldman Sachs, Wesfarmers and John Singleton’s Riversdale Group have all made significant pub acquisitions in recent months – further indicating renewed confidence in the sector which is under pressure in many parts of the country. [From The Shout, Jul 25, 2012]

Johnstons to sell properties SA’s oldest family company, once pioneer brewers and now hotel and property owners and winemakers, J&AG Johnston of Oakbank SA, is selling its 17 hotels, a shopping centre and several smaller properties in a move designed to ‘enable funds to be invested in other ventures … as part of the evolution of long-term family investment’. The properties, to be offered as one line or individually, are expected to attract significant interest from groups and other purchasers. [From SA Business Journal, Jul 31, 2012]

We are drinking more at home Aussies are drinking more at home, according to recent research. 74% of us now enjoy our alcohol at home or a friend’s place, a big contrast from the previous generation who consumed 70% of its alcohol in pubs. Cheaper take-away prices, more home entertainment and tougher drink-driving laws are seen as major causes of the shift. [From Adelaide Sunday Mail, Aug 5, 2012]

BEER & BREWING: Australia – general

Raw materials In the Glencore International – Viterra saga, the Australian Foreign Investment Review Board (FIRB) has now approved the takeover, but concern has been raised by some in SA that Viterra’s head office may not remain in Adelaide and that Glencore may not continue Viterra’s level of commitment to the state. FIRB’s approval completes the round of Australian hurdles the takeover faced. Glencore has agreed to expanded commitments in Canada for the next five years but has yet to guarantee contributions to research and development in SA. However, Glencore says that Viterra will continue to work closely with authorities to refine access arrangements for SA’s grain ports. Local gossip confirms that Viterra will continue as ‘the brand’ in Australia. [From Adelaide Advertiser, Jul 28, 2012]

In the meantime, we are reminded in SA Business Journal, July 31, 2012 that Australia is a leading global supplier of malting barley and malt, with Viterra noted as the country’s largest maltster, producing more than 500,000 tonnes per year. Gary Hughes, Viterra Malt’s executive manager, featured on the front cover of this issue.

BEER & BREWING: Australia – mainstream breweries

Carlton & United Breweries (CUB) Lager volumes declined by 8% in the quarter ended June 30, according to a trading update issued by parent company SABMiller on July 27. In an interim management statement, SABMiller said the Australian lager industry continued to be affected by the loss of market share to other alcoholic beverages, together with subdued consumer sentiment, leading to a significant reduction in volumes. The decline excludes the effect of the termination of some licensed brands and an increase in trade stock levels in the corresponding period of the prior year. But SABMiller said it is making good progress with ‘synergy delivery’ and with plans to strengthen CUB’s brand equities and retail engagement. A recent advertisement for a Head of Innovation to join its marketing leadership team underlines a recognized need to introduce a new approach. [Australian Brews News Jul 28, 2012]

Flat beer sales and the loss of production of Carlsberg and Stella Artois have led CUB to shed 33 jobs at its Abbotsford brewery with the closure of B2, one of one of the site’s seven production lines. B2 is an older packaging line and the company says that it expects voluntary redundancies to cover all job losses, which will be finalised by October. [From ABC radio news services, The Age & other sources Aug 2, 2012]

Casella The Casella family’s brewing venture has moved into the next phase, with in-store sampling of its new Arvo beers currently underway in liquor stores across the country. Voting on the two beers is close with 55% preferring Brew 51 and 45% Brew 34 and Casella’s have indicated that one will become a permanent brand in the spring. [From The Shout, Aug 3, 2012]

Coopers Chairman Glenn Cooper and MD Tim Cooper were named Champions of Entrepreneurship at presentations in Adelaide on July 26 of the Ernst & Young Entrepreneurs of the Year Awards for 2012. The awards recognised their long records of achievement and roles in increasing the brewer’s output from 260,000 to 650,000hL in ten years. [From Adelaide Advertiser, Jul 27, 2012]

New national marketing director Cam Pearce comes with a solid brewing industry background – he is a son-in-law of the late Maxwell Cooper and his father Des spent about 30 years at SA Brewing Co in Adelaide last century in various technical roles, including head brewer and later production manager. [From SA Business Journal, July 31, 2012]

Lion The Beer, Spirits & Wine division in Australia saw volumes increase 3.4% in the half-year to March 31, leading to a 4% revenue increase to $929.1 mn. Volume share growth occurred in every state, with strong performances from its core brands: XXXX GOLD, Hahn Super Dry, Tooheys Extra Dry and XXXX Summer Bright Lager. The James Squire trademark continued to drive growth in the craft market, posting volume and value growth over 50% Corona Extra was added to the international premium portfolio in the half; however the first shipments were not received until April and are therefore not included in the H1 result. Since the reporting period, Stella Artois and Belgian specialities Leffe, Hoegaarden and Belle-Vue Kriek have been added and, from November, Guinness and Kilkenny will also be included – rounding out the international premium portfolio to six of the top 10 brands in the market. [From Australian Brews News, Aug 4, 2012 & other sources]

BEER & BREWING: Australia – craft & smaller breweries

General As hinted in early Digests, there is now so much happening in the burgeoning domestic craft brewing scene that it is impossible for my little operation to even attempt to keep abreast of all the news. Excellent coverage is given by on-line sources such as Australian Brews News, Microbrewing News, The Shout etc and these are recommended to readers. Nevertheless, I will endeavour to continue to record some snippets ….

SA: IPA Day (August 2) was celebrated with a degustation dinner at Shanker’s Authentic Indian restaurant in Prospect. IPA Day, launched last year by beer evangelists and social media personalities in USA, is ‘a universal movement created to unite the voices of craft beer enthusiasts, bloggers, and brewers worldwide, using social media as the common arena for connecting the conversation.’ This year beer enthusiasts across the globe were asked to join in a collective toast to one of craft beer’s most iconic styles: India Pale Ale! [From Australian Brews News, Jul 23, 2012]

Lobethal Bierhaus launched a new 3.5% abv beer at the Wheatsheaf Hotel on August 1. Developed with the collaboration of the Yeastie Boys of Wellington NZ and called Bruce (after brewer Alistair Turnbull’s dog), it’s a golden bitter with bitterness around 32IBU; full-flavoured and well balanced it is a welcome addition to the available range of mid-strength products. [From Australian Brews News, Jul 24, 2012 & other sources]

A review of the craft scene in SA, emphasizing the success of the Goodieson Brewery at the recent Royal Adelaide Beer Awards, also indicated that Coopers considers itself a craft brewer. Expansion of the Thomas Cooper Selection range, following the promising acceptance of the new Celebration Ale, was under review, according to chairman Glenn Cooper. [From Adelaide Advertiser, Aug 4, 2012]

The leasehold of the Myponga Brewery was advertised again for sale in late July as ‘a stunning redeveloped property ready for the entrepreneur to exploit… microbrewery, bar, spring water source, beer garden overlooking the water, function centre’ [From SA Business Journal, July 31, 2012]

BEER & BREWING: International

Global beer production In 2011, China was well ahead with an output of just under 490 mn hL, followed by USA (225), Brazil (133), Russia (98) with Germany (96) in fifth spot. In 2011, as in 2010, almost 92% of the global beer output was accounted for by the 40 biggest beer-producing countries and about half of the world beer market can be attributed to the five largest brewing groups, viz. AB InBev, SABMiller, Heineken, Carlsberg and China Resource Brewery Ltd. [From BelgianShop WeekLetter 1471, Jul 27, 2012]

New Zealand scene A recent survey by Brewers Guild of NZ notes a big increase in small craft breweries and the flow-on effect this has had on the brewing landscape. Total breweries in New Zealand increased by 42% over the four year period of the survey, from 48 in 2008 to 68 by the end of 2011, with small craft breweries (those under 400hL per annum) growing the most, doubling from 15 to 30 over that time. Small to medium sized breweries (400 to 1,000hL per annum) saw the most consistent increase in production over the period, with output growing by an average of 7% in each six month period. Notably, the total craft beer market grew by 14% in the last period of the survey (June/Dec 2011) and production of craft beer increased by an average of 3% per annum over the past three years. NZ beer is also travelling abroad: 42% of those surveyed are currently exporting and a further 32% expect to in the next two years. ‘Certainly the increased number of small brewers and the volume of the beer that they are producing suggest that the public are changing their drinking habits. There is an explosion of beer flavours and styles available to consumers, and that means more of the public are finding a beer that suits their taste and lifestyle’, said Guild president Ralph Bungard. [From Australian Brews News, Aug 2, 2012]


Excise up a little On August 1 the biannual inflation-linked adjustment of excise on beer, spirits and cigarettes should result in only small increases with inflation at a 13-year low. For spirits, a 12¢ increase per 700mL bottle applies and beer drinkers face a rise of 8¢ per carton of full strength brands but no increases in excise on draught across the bar will apply. [From Adelaide Advertiser, Jul 27, 2012]

Recycling Research conducted by Boomerang Alliance (an organization committed to reducing waste) suggests that some major companies are using the SA and NT container deposit schemes to charge more for some beers and soft drinks. By comparing prices in Adelaide & Darwin with those prevailing in Sydney & Perth, where deposits do not apply, Coca-Cola Amatil, Lion and Schweppes were found to add more than the 10¢ deposit while Coopers, Foster’s and Diageo did not. The existence of higher prices is being used by some to support the argument against the introduction of a national container deposit scheme to be discussed by federal and state ministers later this month. [From Adelaide Advertiser, Aug 6, 2012 & other sources]

Woolies liquor sales up Woolworths has reported total liquor sales for the 2011-12 financial year of $6.6 bn, 11.9 % up on last year. Coles also reported food and liquor sales at 4.9% higher. [From The Shout, Jul 23, 2012]


Coke’s new bottle At the ENVIRO 2012 conference in Adelaide on July 26, The Coca Cola Company gave details of its new plant-based packaging technology, which aims to eliminate fossil fuels from the production of plastic packaging. The world’s ‘first ever recyclable PET plastic beverage bottle made partially from plants’ was shown at the meeting. The new bottle, in the production of which the mono-ethylene glycol (MEG) used – about 30% of the PET by weight – was derived from ethanol made from sugar cane, has been in use in Coca-Cola Amatil’s eastern states plants from early this year. In SA, C-CA installed two new PET blow-fill lines in late 2011 and these may be converted to the new technology later; the Thebarton plant currently produces about 110 mn PET bottles per year. [From Adelaide Advertiser, Jul 26, 2012]


Accolade to shut bottling facility On July 24 Accolade Wines announced the closure of its Reynella (SA) bottling plant, with the loss of 175 jobs. In a deal with Treasury Wine Estates (TWE), Accolade’s brands – including Hardy’s, Banrock Station & Leasingham – will be bottled at TWE’s Wolf Blass winery in the Barossa Valley and Accolade’s plant near Bristol UK will bottle Treasury’s cheaper wines for European markets. The loss of jobs in SA continues the unfortunate trend started earlier when Orlando Wines and several other winemakers moved some bottling operations off-shore. On the other hand, those involved here with the global movements of bulk wine have never been busier.

Accolade reports that US sales of its brands have dropped 30% since it took over from Constellation Brands, the fall being attributed to the high Aussie dollar, increasing competition from South Africa and Chile and a trend towards newer wine styles in the US market. The company thus must reduce local production costs, found to be as much as two and a half times higher than the standard rate of its competitors. Accolade is the country’s biggest wine producer by volume – it processed 285,000 tonnes of grapes last season to give 20 million cases of wine. [From Adelaide Advertiser, Jul 25, 2012]

Back to cork Improvements in the quality of corks now again available to Aussie winemakers is cited as one reason for Barossa Valley producer Rusden Wines to revert to corks for its high-end brands, particularly for red wines for export to China, Europe and USA. Rusden considers that some wines do not age predictably when sealed with screw-caps. [From interview, ABC radio, Jul 26, 2012]

National bodies to merge From July 2014 the Grape and Wine Research and Development Corporation (GWRDC) will merge with Wine Australia to form a new statutory body called Grape and Wine Australia. A five-year R&D plan, with investment of about $100mn, has been formulated and a new manager is being sought before the merger. [From Adelaide Advertiser, Jul 29, 2012]



Healesville property acquired Little World Beverages announced today that it had acquired Lot 2/316-336 Maroondah Highway, in the town of Healesville, VIC for an undisclosed sum. The site is adjacent to the Giant Steps/Innocent Bystander Winery & Cellar Door owned by Phil Sexton and located in the heart of the Yarra Valley. LWB is refining plans to establish a regional brewery on the site to provide the company with new product development opportunities and Victorian production capacity. The existing Little Creatures beers will continue to be brewed and packaged in Fremantle, Western Australia where LWB plans to commission a new brewery in 2008 alongside the already installed new packaging line. This will make available the existing brew house and original packaging line for relocation to the Victorian operation. [From Update July 2007]


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