Australia’s largest brewer, Lion, has confirmed plans to roll out a new home draught beer system later this year.
The system, to be called Tap King, is still under wraps but a spokesperson for Lion has confirmed that the company is working on it:
We can confirm that Lion has been working on a new draught system designed for beer drinkers who are passionate about their draught beer but can’t always get out to the pub as much as they might like to.
We’re not in a position to provide further information at this stage and the product won’t be available until later in the year
Though not willing to announce much, Lion has unveiled its plans to members of the Australian Hotels Association. Australian Brews News understands that many hoteliers who have been briefed are unhappy with the plan, believing it risks driving drinkers from hotels and undermine their businesses.
Brews News understands that the Tap King system involves a ‘caddy’ that will sit in a consumer’s home fridge and for which they will purchase 3.2 litre PET bottle refills. The caddy will cost around $25 dollars and the beer refills will cost approximately $22, representing the equivalent of approximately $2.90 per 425ml schooner or $1.96 per 285ml pot. Apparently five beers are currently planned to be sold, including James Squire Golden Ale, XXXX Gold and Toohey’s New.
Lion has reportedly advised hoteliers that it has spent upwards of ten million dollars developing the system. One report has put the investment as high as $20 million.
The move is believed to be in response to declining beer consumption levels and the general move away from consumption in hotels. Lion is reportedly selling the move as something that will support on-premise draught sales. The brewer has been describing the caddies to hoteliers as being the equivalent of the popular home coffee pod machines, with the explanation that these have not hurt the cafe industry.
However, publicans have expressed concern that with the recent changes to smoking laws, online gambling and availability of sport on pay television, the access to home draught beer is seen as a further reason for drinkers to stay at home rather than venture to the pub.
Officially the industry is keeping a measured tone, with AHA Newcastle branch President, Rolly de With, saying his member were concerned by the Tap King system but could understand why Lion sees the need for it.
“The 50 or 60 members who were briefed the other night were all looking for the positives in the system but few could find positives in it,” he said.
“But with beer losing market share to wine and other things like spirits, we can understand why they would try something like this.”
“But we faced the same issue with premium beers such as Corona, where the public could buy from the discount liquor barns to drink it at home cheaper than hotels could buy it.
“Hoteliers need to have faith in our operations, and be confident that we offer a point of difference through the value that we add to the beer drinking experience.”
Even so, concerns were raised at this week’s AHA Newcastle meeting in which the briefing occurred.
“We certainly expressed our opinion,” Mr de With said.
“A unanimous vote of no confidence in the product was passed.”
“I wouldn’t say that the members felt betrayed by Lion, but there is concern because we don’t know what impact it will have on the draft beer market with hotels.”
Mr de With also indicated that with “serious dollars” having already been spent on the systems, his members were concerned that they hadn’t been consulted and that with the millions already spent, implementation of the system seemed inevitable despite their concerns.
While details of the system are still sparse, the Tap King system has been under development for some time with the Tap King Trade Mark application lodged on 31 May 2012.
It is an interesting move to spark renewed interest in beer, but at the risk of alienating pubs. There is no doubt that the declining mainstream beer market needs the sort of interest and innovation that is fuelling excitement in the craft and premium end of the market, but will that hurt Lion’s dominant position if publicans turn militant against the brewer? It was such discontent that publican-turned-beer baron Bernie Power credits with giving rise to his eponymous brewery in the 1980s:
“It became quite clear to me that there was a lot of discontent in the marketplace. Hoteliers and others were angry, frustrated and didn’t like the company, or both companies in fact.”
“It was quite clear to me as a hotelier that there would be an opportunity to build a brewery.”
Lion’s precursor was the dominant player in Queensland at the time and discontent was such that Powers quickly achieved ten per cent of the local beer market.
We’ll keep you posted.