Why 2018 is beer's year of living dangerously

January 5, 2018

Our eyes were far too hazy to peer into the 2018 crystal ball during the past couple of weeks.

 

After all, 2017 was the year of the cloudy NEIPA so getting a clear picture of the Australian beer scene has been like trying to look underwater while swimming in the Yarra (although why anyone, except an Australian Open champion, would do such a thing is beyond us).

 

On parting the mind fog that comes with a pleasant Christmas-New Year period enjoying a bunch of the country’s great range of artisanal brews, The Sip’s team has gone Nostradamus to foresee what is in line for the beer industry over the next 12 months.

 

Unfortunately, the prophecy is that 2018 will be beer’s year of living dangerously.

 

CONTAINER DEPOSIT SCHEME

Let’s be clear about this Government-inflicted penalty.

 

It is not a recycling program it is a litter tax. A program can’t be considered recycling if the State that imposes one of the most imbalanced financial sanctions on a community doesn’t actually have the capacity to turn the collected items into new things.

 

Sure, the WA Government will spend the next 12 months spinning the message to the public that it should enjoy the warm and fuzzy feeling from putting beer bottles and cans into reverse vending machines instead of seeing them dotting parks and roadsides. In itself that seems a noble exercise.

 

But as our NSW cousins have discovered the Container Deposit Scheme is as flawed as an oxidised India Pale Ale.

 

And the people who are going to wear the burden of the program are those who can least afford to be caught up in the mess – small breweries.

 

While the WA Government bullshit peddlers will keep telling us the scheme is all about getting back 10 cents for each beer can and bottle returned, they aren’t going to mention that it will cost you – yes you, the drinker – up to 19 cents to get back little more than half.

 

Naturally the Government isn’t going to fund the scheme so the drinkers will. And that means that a carton of beer will instantly cost almost $5 more. The rise has nothing to do with cost of ingredients, distribution or wage increases. It is a dirty little litter tax.

 

Although the CDS isn’t slated to start until January 1 2019, the cost of supporting the scheme – that is building a bevy of funds – will kick in later in the year.

 

It could well mean that 24 x 375ml cans of 7.5% ABV will now push past $100. That smashes smaller breweries who often operate in that domain. There is no price elasticity at that end of the market. And it will make the mass-manufactured brews from the macro companies, who ironically will run the scheme (talk about the fox in charge of the hen house!) more appealing to consumers.

 

Every beer in a brewery’s packaged stable will also require a $80 registration fee. If you have 10 cans/bottles in your arsenal then that’s $800 just for existing. And then if the brewery operates in another State market with a similar program, it will have to fork it all out again.

 

Short of the Liberal Party’s GST platform going into the 1993 Federal Election there hasn’t been a more confusing and deceitful political policy in living memory.

 

Many in the WA Brewers Association fear job losses because of the costs and impact of the Container Deposit Scheme. At best, it will stop the growth of some small beer producers. At worst, it could end the dream for some brewers.

 

And did we mention that the wine industry is exempt from the CDS? Not even the Farrelly Brothers could write a more humorous script. Yet the beer sector isn’t laughing.

 

No wonder our New South Wales brethren has referred to its scheme as “shambolic”.

 

FLOOR PRICE FOR ALCOHOL

On top of the CDS is the State Government’s push for a minimum floor price of alcohol.

 

The legislators will whack drinkers for the vessel so they might as well have a crack at what is inside, too.

 

A proposed $1.50 tax on a standard drink of alcoholic beverage sold in package will greatly hit the wine sector and considering the outrageous advantages that industry has had over beer for the past two decades you won’t see too many brewers crying in their Pale Ales.

 

Indeed, wine retailers’ ridiculous price cutting, with booze barns selling bottles of crap juice for under $3 a bottle, have created this mess.

 

However, a floor price will hit the beer makers with an estimated $3 rise in the cost of a standard carton from one of the macro breweries. And so the cost will flow up the beer chain! And to the drinker.

 

WARNING LABELS

In November WA Health Minister Roger Cook called on his interstate counterparts to implement mandatory warning labels for pregnant women on all packaged alcohol.

 

Some of the bigger breweries already have the symbol on their products but operate on a voluntary basis.

 

Apparently, the public is again unable to make up their own minds on responsible consumption. But stickers and logos on bottles and cans do stuff all. Members of the community, quite rightly, are free to make up their own minds on what they want to ingest.

 

Even Professor Steve Allsop, a program leader at the National Drug Research Institute, told AAP in November, “There is no evidence it changes behaviour.”

 

But if implemented small WA breweries will be required to decorate their cans and bottles with a no drinking if pregnant label, a DrinkWise stamp, recycling logo, standard drink advisory, bar code for Container Deposit Scheme and possibly a graphic highlighting membership of the Independent Brewers Association.

 

Will there be any room left to tell the drinker what is exactly in the vessel?

 

EXCISE

Last month the wowsers in the self-appointed and self-righteous modern-day Temperance League lobby groups presented a proposal to the Turnbull Government that the tax on beer should rise.

 

By as much as 10 per cent.

 

According to a study compiled by Fairfax and based on current settings, “the tax on light beer at pubs would increase more than five-fold, while tax on mid-strength ales (and lagers) would double and tax on full-strength (brews) would increase by 50 per cent.

 

“Altogether, Australians would pay $2.9 billion in extra taxes while reducing their consumption of alcohol by an estimated 9.4 per cent, according to a pre-budget submission by the Foundation for Alcohol Research and Education.”

 

How long before the Government is asked to tax the number of breaths a beer drinker takes in between sips? They’ve whacked an extra cost on everything else to do with enjoying a quiet brew.

 

FREMANTLE CITY COUNCIL

The port municipality has been confused for some time.

 

Two years ago it mistakenly believed it was in control of national policy by deeming it would strike Australia Day from its calendar (but we bet the councillors didn’t open up the office for work on January 26!).

 

Now there is a push for all new bar and hotel approvals in the City to have as much as 50-percent alcohol-free area. And a smart person would think there is an eye for pushing the idea into existing venues in the near future.

 

One councillor doesn’t want Fremantle to be seen as an “alcohol destination”. Well I think that is a bit late. And from some of the council’s decisions it isn’t a wonder a drink is needed on a trip to the tired central strip.

 

Fremantle Mayor Brad Pettit wrote on his blog the original story, or at least the headline, on the idea in Seven West Media was misleading.

 

Yet he also wrote, “Acting Fremantle mayor Ingrid Waltham said that in considering a draft policy the intention was to provide guidance on what proportion of a development site should be used for a licenced premises and what proportion should be set aside for other uses such as short-stay accommodation, entertainment, commercial or retail.”

 

Whatever its move, the port has put beer on notice. Such a shame considering the strong brewery history in Fremantle.

 

And we wonder what the Fremantle council will do with the monies it receives from turning bottles and cans into 10-cent refunds from curbside rubbish collections? They didn’t pay the original 19 cents for the privilege. Wonder if ratepayers might get respite? Don't count on it.

CORPORATE BUY-OUTS

The spate of small brewery sales to close 2017 will undoubtedly have an impact over the next 12 months.

 

Considering CUB and Coca Cola Amatil spent around $75 million securing 4 Pines, Pirate Life and Feral there is unlikely to be too many coins left in the piggy bank for more in 2018.

 

So those small breweries whose end goal is to sell to a strong bidder might have to be patient.

 

Meanwhile, 4 Pines, Pirate Life and Feral will benefit from the wider distribution channels afforded by their new owners to get greater market share on their former colleagues.

 

HYPE

There should always been a level of excitement with the emergence of a new small brewery.

 

Unfortunately, the fervour at seeing a friend or neighbour diving into the deep sea of beer making has swamped the standard of the products.

 

In short, the quality of some beers just hasn’t matched the hype that has enveloped a few young breweries. That was evident at the Fremantle Beer Fest when it was obvious a few relatively new players weren’t yet up to the desired standard.

 

Most will get there. Development is all about improving. There will be young brewers who will relish the challenge of getting better with every beer. And every drinker wants that to occur because in the end they will be the ultimate beneficiaries.

 

Not every brewery will emulate Pirate Life by hitting its first pitch out of the park.

 

But some social media cheerleaders need to step back and consider the beers for what they are, not championing them solely because of hoopla.

 

Undeserved fanfare doesn’t help anyone.

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