Stone & Wood labeling revives Byron Bay controversy

Author’s note: This article was written scheduled to publish prior to the announcement of Lion’s purchase of Stone & Wood today.

Stone & Wood’s use of a third-party brewery to facilitate its entry into the contemporary beer market has revived the contentious issue of transparency in labeling for beers made under contract.

Last week the brewery’s general manager Nick Boots confirmed to Brews News that, due to ongoing capacity issues at its Murwillumbah production base, the brewery had made the ‘pragmatic’ decision to brew the new beer at Australian Beer Co.’s Yenda Brewery in central New South Wales.

He said that he expected the beer to be outsourced for up to two years until the company’s planned expansion is finalised.

The third-party brewery, Australian Beer Co., is a joint venture between Coca-Cola Amatil and winemaker Casella.

Despite the contract arrangements, the new 3.5% abv crisp lager notes that the beer was “Brewed by Stone & Wood Brewing Company Pty Ltd. 100 Centennial Circuit, Byron Bay”.

Trade presenters and marketing material for the beer carry the notation “Born & Raised in Byron Bay”.

The labeling decision comes despite the 2014 action by the Australian Competition and Consumer Commission (ACCC) that saw Carlton & United Breweries accept a $20,400 fine for potentially misleading conduct for brewing Byron Bay Brewery’s under licence and giving the overall impression the beer was brewed in Byron Bay.

It also comes after Stone & Wood co-founder Jamie Cook was a vocal critic of the major brewery’s actions, describing the lack of transparency as a ‘corporate comb-over‘ and noting the long-term impact on consumer confidence the action would have on consumers.

Legal requirements

Alcohol labeling in Australia is governed by a raft of unrelated but interlocking regulatory requirements designed to protect consumers from a food safety perspective as well as covering appropriate marketing and protection from false and misleading claims.

Under the mandatory food standards, a label is also required to be marked with the name and address of the person who packed the product or on whose behalf it was packed. The address should be a place in Australia where a document may be served on a person, but more than one can be included if a contract brewer is used.

While separate to the food standards, under Australian Consumer Law businesses cannot make false, misleading or deceptive claims about their products, and the ACCC looks to the overall impression conveyed to a reasonable consumer by the advertisement or packaging as a whole.

In the 2014 CUB case, the ACCC considered that the “overall representation made by the beer’s labeling was likely to mislead consumers to understand that the beer had been brewed by the Byron Bay Brewing Company, a small brewer, at its brewery in Byron Bay, New South Wales. However, the beer was actually brewed by CUB at its Warnervale brewery, some 630 kilometres away by road from Byron Bay.”

In a similar case, the ACCC took action against Maggie Beer Products in 2015 when a selection of its products was made under contract by a third party in Queensland.

The ACCC noted that the following text had been on the labeling of these products, in close proximity to each other:

  • the “Maggie Beer” logo which depicts a pheasant with the words “Maggie Beer A Barossa Food Tradition”;
  • the words “Made in Australia” or “Product of Australia”; and
  • the words “Maggie Beer Products: 2 Keith Street Tanunda South Australia 5352”.

The ACCC considered that as a result of these representations in close proximity on the labels, a reasonable consumer would have gained the overall impression that each of these products was manufactured in Tanunda, the Barossa Valley and/or South Australia, when in fact this was not the case.

ACCC advice to brewers

ACCC chair Rod Sims told Radio Brews News in 2015, following the CUB case, that the watchdog had written to brewers, “to make sure they understood what had happened and what it meant for them”.

“Fundamentally we’ve been trying to get two things, one is to get them to say when it’s in fact a big company that’s making the product,” he said.

“Also we’re making sure that when you’ve got a small company, if they start to brew the beer under contract, that they make that clear on the back of the label.”

While Sims didn’t specify what ‘making it clear’ means, he told Radio Brews News that by then 12 different brewers had changed their labeling approach and the watchdog was still in discussion with others.

“I’m delighted, for example, to acknowledge that the Lion Group is now saying that, when it’s one of their beers, that they’ll say on the back of the label that this particular beer is ‘part of the Lion Group’,” he said.

Lion had commenced an internal review of its labeling even before the ACCC had handed down its decision in the CUB case and by 2015 had changed labels for its brands including Little Creatures to reflect its ownership.

Presently, bottles of Little Creatures Pale Ale brewed at its own breweries in Fremantle and Geelong, note on the bottle “Beer brewed & bottled at various locations around Australia by or under licence from Little Creatures (part of the Lion Group.)”

In 2016 Lion purchased Byron Bay Brewery, central to the CUB ACCC case, and changed its labels to remove any doubt about provenance adding “Born in Byron Bay. For bottling, the beer is brewed outside of Byron Bay.

Hear ACCC chair Rod Sims’ 2015 advice to brewers on labeling transparency

Independent Brewers Association guidelines

The former Craft Beer Industry Association, now the Independent Brewers Association, maintained a public silence in relation to CUB’s labeling at the time of the Byron Bay release, though advised that it would develop a position paper on labeling.

Following the ACCC decision in April 2014, the CBIA issued an announcement “welcoming any decision that helps clarify what is required of our members”.

“The CBIA believes that as an industry, craft beer producers have a responsibility to ensure that their consumers are provided with all of the necessary information to make an educated choice about what beer they buy,” the statement read.

“We hope that yesterday’s decision will help give the necessary guidance to the industry about what is required on our labels”, then CBIA Chair Dave Bonighton was quoted as saying.

“This decision has possible implications for all companies that have all or some of their beers contract brewed and we will be working with the ACCC and seeking independent legal advice to ensure that the industry is educated about its legal requirements.”

Bonighton’s brewery Mountain Goat was one of the breweries affected by the ACCC’s decision, with the brewery having its two biggest selling beers produced at Asahi’s Laverton production brewery from 2012. The brewery hadn’t noted the arrangement on its packaging until the ACCC’s intervention.

Mountain Goat was sold to Asahi in September 2015, with Bonighton noting that the Asahi agreement was a precursor for the sale.

“They knew exactly how the brand was growing and they could see the appeal of craft,” he was quoted in a 2017 article in Good Beer Hunting.

It wasn’t until 2018 that the IBA launched beer labeling guidelines to assist brewers “to get their labeling right”.

The guidelines extensively cover the complex regulations around labeling, including covering the Australian Competition Law generally. However they don’t include the consistent advice the ACCC has been giving the industry since the CUB case, “that when you’ve got a small company, if they start to brew the beer under contract, that they make that clear on the back of the label.”

Stone & Wood’s response

Contacted about the labeling decision, Stone & Wood advised Brews News that it may revise the labels.

“We hadn’t locked into a copacker at the time the labels were run, and in fact we had a last-minute change of brewer so that neutral position was needed,” the statement advised.

“We will revise labeling once a consistent position has been established re: production location of the beer, we have deliberately not used our usual “Brewed and Bottled in the Northern Rivers” packaging copy in recognition of not wanting to mislead.”

*This article was originally posted under the headline Stone & Wood revivesByron Bay labeling controversy

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