Megabrew may have silver lining, craft brewers told
Anheuser-Busch InBev’s takeover of SABMiller is a “really scary” prospect for small Australian brewers, but there may actually be some benefits, according to CBIA conference keynote, Steve Baxter.
Tech entrepreneur Baxter, who founded internet service provider SE Net in 1994, reaffirmed that once finalised, the combined entity dubbed ‘Megabrew’ will be selling almost one in every three beers consumed globally.
“That should be illegal, that’s actually really scary. That’s going to make for tougher times,” he told the Australian Craft Brewers Conference (ACBC) 2016 in Brisbane.
“You guys are going to be collateral damage unless you do something different,” hewarnedsmaller brewers present in the room.
But the assault of a powerful new rival may not be all bad news, according to Baxter, who related his experience from the tech world.
“In 1995 Telstra were pouring hundreds of millions of dollars a year into a TV advertising campaign,” he said.
“That literally though, was the rising tide that lifted all boats. We came in right in behind and Telstra had a horrible, horrible quality product but they were in everyone’s faces.
“Everyone tried it with Telstra, they got their five hours free and then they left and came to us. So you can ride the back of that wave, you can use your competitor to your own advantage if they’re out there splashing a lot of cash around,” Baxter said.
His comments bring to mind those of Brooklyn Brewery founder Steve Hindy, in his keynote address at last year’s conference.
Hindy said that by playing in the craft segment, the big brewers risk seeding consumers onto craft beers produced by their independent competitors.
It looks a valid point, as CUB and Lion continue to pour money into Pale Ale and Golden Ale line extensions of their mainstream beers, with mixed success.