IBA concerned about impact of Endeavour fee on brewers

The Independent Brewers Association has expressed concern about the impact Dan Murphy’s fee increase will have on small brewers and asked the ASX-listed company to reconsider.

The story broke yesterday as a number of brewers forwarded copies of emails they had received to national media outlets, including Brews News, highlighting the charges and expressing concern about the impacts that the fee will have on their already thin margins.

In a measured response on behalf of its members, the association’s CEO Kylie Lethbridge called on the company to reconsider, noting that what Endeavour considered a small rise would have large effects on brewers.

“Our main aim is to work the major retailers as partners in the promotion of independent craft beer and to ensure ranging opportunities are available to our members,” the statement said.

“We advocate in support of these Aussie-owned businesses to ensure local jobs are available and so that profits stay onshore and would ask that Dan Murphy’s and BWS do the same.

“Aussies are lining up to buy local and are now, more than ever, focused on community but with the multitude of barriers to success for a brewery eg. energy and materials costs, skills shortages and limited access to taps, the retail chain is essential to ensure consumers can continue this valuable support.

“In this case we walk a fine line and risk this often healthy relationship as their commitment not to pass this new cost on [to consumers] means already burdened small businesses will have to absorb it.

“We know the big guys are unlikely to notice but what does it mean for the independent craft brewers? A further reduction in profits. And if they dispute the cost, a risk of losing ranging options.

“In a time of crisis for many small businesses in this country, we would ask EDG to reconsider what might seem a small charge to them as it will have a significant impact on many of their current suppliers.

“And the impact will not be a positive one.”

Endeavour Drinks Group, which has a market capitalisation of more than $12 billion dollars, last year reported revenues had grown to $11.6 billion. Its profit for the year, after tax, also increased 11.2 per cent to $495 million.

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