What does CUB sale mean for Aussie beer drinkers?

July 19, 2019

Shock. Horror. Time to clean out the fridge. We’ve lost a national icon. No more Victoria Bitter for me.

 

Well the truth about Carlton and United Breweries is that while the maker of some of the country’s favourite beers might have had its genesis in Victoria 116 years ago, it hasn't really been dinky di Australian for almost a decade.

 

So the sale of CUB to Asahi simply sees the originator of Victoria Bitter and Carlton Draught – and the current custodian of crafty duo 4 Pines and Pirate Life – shifting from one pair of overseas hands to another.

 

But Asahi might be better for taking those brands overseas.

 

SABMiller didn’t steer CUB on an expansion course when it took control in 2011. And while AB InBev made some local acquisitions when it swallowed the South African enterprise five years later, Australian beers, well, remained local.

 

Australia’s other giant beer company, Lion, also in Japanese control after Kirin took over in 2009, had entrenched its Australian operation but also looked to take brands worldwide.

 

The expansion of Little Creatures is a case in point. The little brewery from Fremantle has grown into arguably Australia’s flagship international beer, initially by creating a foothold in Hong Kong, Shanghai and Singapore.

 

With China and greater Asia featuring an emerging middle class of around 300 million people, foreign beer is being courted in greater numbers.

 

Although it sold out of Tsingtao two years ago – mainly to pay down debt – Asahi knows the Asian beer market well beyond the land of the rising sun.

 

Asahi has also been trimming AB InBev of other beer brands and Peroni, Grolsch and Pilsner Urquell were added to the Japanese company’s portfolio three years ago.

 

So now Asahi, which already owned Mountain Goat and Cricketers Arms, has distribution channels in major Asian and European markets.

 

Read the CUB Media Release concerning the sale here.

 

How does that help the Australian brands? Well, it might be highly positive for a brew such as Great Northern because it has a unique taste amongst the rapidly expanding Asahi stable and may attract some appeal with our northern neighbours. But it could be particularly beneficial for Pirate Life and 4 Pines, which were recent craft brewing acquisitions for CUB.

 

While the howls of lament about selling out befell the Australian craft brewing community when Pirate Life and 4 Pines joined the Big Beer stable, the fact is the sales have been outstanding successes for the South Australian and New South Wales operations.

 

And let’s be honest, isn’t it all about getting your brand into drinkers’ hands?

 

Earlier this month CUB vice-president of corporate affairs, Julian Sheezel, told the Australian Financial Review ''we've exceeded expectations on growth for both 4 Pines and Pirate Life''

"So far this year, these breweries combined have been growing above 50 per cent over 2018,'' he said.

 

Now even greater doors in Asia could open for 4 Pines and Pirate Life. Although the crusaders of independent beer might now shun the two breweries, the might of being part of a group that controls most of the Australian beer market has enabled both to get their beers into more venues. Take 4 Pines’ set up at the SCG as an example.

 

Mountain Goat and Cricketers Arms can look forward to similar opportunities now they are part of the big Asahi-CUB family with greater distribution.

 

And what that means is that with so much variety on the combined team, CUB won’t be buying any other craft breweries for a very long time. So apologies to those independent beer makers who had that clause as part of an exit plan.

 

Documents associated with AB InBev’s proposed yet ultimately unsuccessful Hong Kong stock market float had CUB owning 48.8 per cent of the Australian beer market. Add in Mountain Goat and Cricketers Arms, Super Dry and Peroni and more than half of all brews sold in Australia will be in Asahi’s control.

The main rival in Japan and now in Australia, Kirin, has a 41 per cent share through Emu Export, Tooheys New, Little Creatures and James Squire et al.

 

So has the Australian beer industry sky fallen in following the CUB sale to Asahi?

 

Hardly. All that is really happened is a boardroom shuffle of ownership papers. And let’s face it most of the Carlton Draught, Emu Bitter, West End Draught and Great Northern drinkers didn’t have a clue their favourite drops were owned by a Brazilian company based in Belgium anyway. And, if it was known, they didn’t give a stuff.

 

And those on the independent beer train had turned their back on Big Beer long ago.

 

While the accountants and lawyers will be hard at work shifting the brands from one overseas brewing giant to another as part of the $16 billion sale, it will essentially be business as usual for the average Australian beer drinker at the corner pub.

 

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