'Rage against Gage': Independent brewers rattle the big boys of beer

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'Rage against Gage': Independent brewers rattle the big boys of beer

By David Prestipino

The boom in the craft beer industry shows no sign of slowing but it's left a bitter taste in the mouths of the conglomerates which now control more than 80 per cent of Australia's beer market.

As the Independent Brewers Association, which represents some 600 breweries across Australia and more than 70 here in the west, prepares for its inaugural National Indie Beer Day on Saturday, the tactics of these overseas companies responsible for brewing much of the beer we buy and drink in our own country could be considered somewhat 'unAustralian'.

Gage Roads will launch its new VHA on Saturday to celebrate the first National Indie Beer Day.

Gage Roads will launch its new VHA on Saturday to celebrate the first National Indie Beer Day.

Craft beer is the fastest-growing beer segment overall, according to independent statistics from IRI Australia, with growth up 48 per cent in the past two years alone. But the bigger the independent brewing industry grows, the more aggressive its more powerful competitors become.

"One of the big guys has a strategy called 'rage against Gage'," Aaron Heary, brew-chief at the Palmyra-based Gage Roads, told WAtoday.

Heary, who is responsible for operations and strategy at Gage Roads, believed the brewing contract the WA independent won to service Optus Stadium when it opened in 2018 sent a shiver up the spine of the big brewers and a powerful message to the nation's other independents that anything was possible.

"It was a humbling experience to win that contract against the biggest brewers in Australia," Heary said.

"We really wanted to use it as a vehicle to tell people about our brand ... but it set the bar, didn't it? It's super exciting."

To that end, Optus Stadium patrons can anticipate some new beers on the stadium menu next year, while Gage will also soon open a brand new brewery Atomic Beer Project in Redfern, Sydney, with plans to build one in every capital city in Australia.

Gage Roads is one of the biggest independent brewers in WA and a member of the IBA, which defines an independent brewing company as being less than 20 per cent owned by a large brewer and producing fewer than 40 million litres of beer a year.

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As West Australians enjoy the spoils of the independent beer boom, the industry is constantly fighting a war skewed in favour of the big wigs, which are desperate to muscle in on the territory.

"They are trying to duplicate the look and feel of independent beer brands to cash in on the demand by Australians for local, innovative, artisanal beer," the IBA said.

This tactic led to the formation in 2017 of the IBA from its previous name, the Craft Beer Industry Association, when small breweries wanted to differentiate themselves from 'faux craft' brands owned by Carlton & United Breweries, Lion Nathan and Asahi – including brands such as James Squire, Matilda Bay, Pirate Life and Mountain Goat.

Now craft beer is more of a category, and independent brewing speaks more to ownership.

Aaron Heary, Gage Roads

The IBA said multinational brewing companies, which will soon own 90 per cent of the Australian beer market, had been creating fake 'craft' beer brands and acquiring independent brewers, further concentrating the local beer market.

Japanese powerhouse Kirin (with breweries including Lion Nathan, Little Creatures, James Squire) and Belgian/Brazilian conglomerate ABInbev (CUB, Matilda Bay, 4 Pines, Pirate Life) right now control more than 80 per cent of the Australian market.

Critically, dollars spent on 'faux craft' beer goes offshore, while purchases of beer produced by independent brewers directly support local communities and the Australian economy.

The flurry of financial activity on froth left almost half of the 18,000 Australian craft beer drinkers surveyed in 2018 by online retailer Beer Cartel unaware of recent brand acquisitions by the multinationals.

Aaron Heary from Gage Roads says the big multinational beer companies are feeling threatened.

Aaron Heary from Gage Roads says the big multinational beer companies are feeling threatened.

It prompted the IBA to launch its 'Independence Seal' in May 2018 so consumers could easily distinguish beers produced by Australian independent brewers and 'faux craft' brews after 99 per cent of respondents expressed a preference for independently produced beer.

The independence seal initiative is now also supported in the US, UK, France, Italy and Ireland.

"The seal really clarifies for consumers what is independent beer and what isn't," Healy said.

"Desire and seeking out authenticity and personal relationships with brands is driving consumers."

Tap beer contracts probe

Allegations the multinationals were using their significant market power to lock independent brewers out of beer taps in Australian pubs, clubs and venues led to an ACCC investigation in 2014.

But the craft brewing industry felt the probe into beer tap contracts and practices was a little flat.

From roughly 40,000 venues across Australia, the ACCC sampled only 36, who said they did not "feel constrained" from allocating taps to smaller brewers.

The ACCC also considered 140 Lion Nathan and CUB contracts, many of which included minimum volume requirements, which could make it harder for independents to access taps in these venues.

Independent Perth Draught launched in 2013 but was quickly imitated by Feral Brewing and priced out of the market.

Independent Perth Draught launched in 2013 but was quickly imitated by Feral Brewing and priced out of the market.

"Many of these existing contracts block independent brewers from those taps, and choice for consumers," Heary said.

There are more than 600 independent brewers in Australia, hundreds of which are members of the IBA, and the majority of them consider market access their biggest obstacle, despite the insatiable and growing demand for their product - permanent or experimental - by genuine craft beer drinkers.

"But we continue to grow, because people want it, and will continue to want it," Heary said.

As evidence of this, the craft beer market is now divided into 'gateway craft', produced by the multinational beer companies, and 'exploration craft', produced by independent brewers. While exploration craft grew 31 per cent last year, gateway craft grew by just four per cent.

"When Gage Roads first launched, craft beer was independent beer," Heary said. "Now craft beer is more of a category, and independent brewing speaks more to ownership."

Inaugural national day of action

There are several celebrations this Saturday to honour the awesome independent brewing industry.

"The IBA is extremely excited to launch Indie Beer Day, our first national public event," IBA chairman Jamie Cook said.

"October 26 will be a day to come together to pause and celebrate our growing role in the community and share it with all Australian drinkers."

The biggest celebration in WA will be at Dutch Trading Co in Victoria Park, where Gage Roads, Margaret River's Cheeky Monkey, Leederville's Nowhereman Brewing Co. and Myaree's Otherside Brewery will band together.

Gage Roads will have its latest limited release VHA on tap. The 'Very Hoppy Ale' won gold at the 2019 Perth Royal Beer Awards, Sydney Royal Beer and Cider Show and AIBAs.

The double dry-hopped beer features a trio of Galaxy, Mosaic and Azzaca hops and is bursting with tropical fruit aromas and rich passionfruit and grounded with heritage barley malt for a smooth ale with gentle bitterness.

"We want to encourage everyone to come down for the live national cheers at 2pm," Heary said.

Nowhereman Brewing Co is also taking over the taps at The Standard on Saturday from 12-2pm, shouting everyone their first beer and unveiling a new look for their three permanent beers; Leederville Lager, Crate Digger Pale Ale and Rhapsody XPA.

Finally, for those down south, Eagle Bay Brewing Co will launch its summer beer early to celebrate the day, with its India Pale Lager available both in bottle and on tap at the brewery.

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