Watching football while having a beer is one of life’s great pleasures and close to a national institution in Australia. Last Friday Coopers Brewery signed a sponsorship with North Adelaide Football Club, ending the Lion Nathan-owned West End Brewery’s near monopoly within the SANFL. This is a good thing for beer, but we have a long way to go before beer drinkers get genuine choice in the beer they drink while watching our national football code.
Sport and community sponsorships, such as Lion Nathan’s with the SANFL, are common across Australia. They are widely accepted and the cash that they provide is viewed as critical for sporting clubs and community associations across the country.
For this reason these sponsorships are held out as being the saviour of sports, sporting clubs and communities. They undoubtedly contribute in a big way to all of these things. However, despite their collateral benefits, they are still just business deals at heart. They cannot be viewed as solely benevolent community contributions when at the same they also serve as vehicles to drive anti-competitive behaviour such as the exclusion of competing products from the market.
There is a vast difference between sponsoring a club and having the team seen drinking your beer when they win and sponsoring an entire League and denying any participating clubs from selling any rivals’ products. One is smart business, the other is simply anti-competitive.
There are legitimate business reasons for large brewers to want to associate themselves with Australia’s largest sporting teams and to have their brands seen by the tens of thousands who watch sport each week. There are legitimate business reasons to sponsor community groups such as surf lifesaving clubs for the halo that such sponsorships cast over the sponsoring brand. But this same advertising usually boasts that the sponsor’s product is “the best”, “the tastiest”, “the most refreshing”. To use these sponsorships to deny drinkers from making a choice about the beers they drink simply undermines these boasts.
As Glenn Cooper told Australian Brews News: “We take the view that if our beers are available and won’t sell, then there’s something that we’re doing wrong.”
And that is exactly right. That is the essence of competition.
The Australian beer industry is no longer, if it ever was, divided amongst a group of state-based players of roughly similar market power fighting over a few percentage points of market share. The breweries are not just battling against competitors offering near identical products in a largely homogenous marketplace any more. The Australian market is fracturing and the brewing industry is slowly growing into a vibrant brewing scene. A growing number of micro and small regional brewers are emerging and producing an exciting range of new and interesting beers. These types of sponsorship deals, and other exclusionary practices, deny consumer choice and simply retard and distort the market.
Sporting sponsorships that are based on restrictions of trade do this under the guise of ‘developing sport’ and in doing so hold both the sports and beer drinkers to ransom.
Australia’s largest brewers, Coopers included, have enormous advantages simply due to their size: massive advertising budgets, economy of scale and efficient distribution channels are just three. They will always have a business advantage for that reason. Small brewers have advantages too; they are small and agile and have the ability to deliver a far wider range of interesting and flavourful beers much more quickly than big brewers. This is where the lines of competition should be drawn. This should be the basis of competition.
For the largest brewers to use the economic power that comes with their size, not to promote their product, but to prevent consumers from being able to make a choice is not competition. It is good for their business, but it is not good business. It is bad for everyone else. It is bad for sports fans, it is bad for beer drinkers and it is bad the development of a vibrant brewing industry.