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Buying taps just plain wrong: Mazen Hajjar

August 17, 2015
By
Mazen Hajjar

Mazen Hajjar

It’s concerning that small, independent brewers are starting to employ the big brewery tactics of locking up taps, says Hawkers Beer co-founder Mazen Hajjar.

All brewers large or small should have equal and fair access to the market, Hajjar told Australian Brews News.

“The reason I am such an advocate of market access is it is healthy for everybody,” he said.

“It keeps the consumer interested because we keep them interested in new products, new guys, new stories happening all the time.

“And it is important for craft beer because competition helps us improve the quality of our production and the quality of our offering, and actually forces us to be responsive to market forces, improving our efficiency and reducing our costs.”

Hajjar said market access in Australia is already badly constrained by the big brewers’ tap contracts, which are currently the subject of an investigation by the Australian Competition and Consumer Commission (ACCC).

As such, he hopes the recent trend towards independent brewers buying taps does not become commonplace.

“There’s quite a few bars that I can name that have recently started, who’ve basically said, ‘sure, we can give you a permanent placement, if you pay an $X amount’,” he said.

“That’s not very healthy for two reasons. First, we’re legitimising what the big guys do… If the ACCC is looking at contract taps, do you really want to be contract tapping yourself?” he asked.

“We have to have the moral high ground here. If you are going to preach ‘no sex before marriage’, you’d better be a virgin.

“But also, we’re locking out the small guy. This industry thrives on the little guy, we need the little guys. They are the people who are driving innovation and creativity,” said Hajjar.

“If I lock a tap and someone else locks a tap and someone else locks a tap and ten of us lock a tap, all of a sudden, that venue will no longer be able to offer some of the small guys a tap, or offer the variety that the consumer’s demanding.”

Hajjar said fees of up to $3500 to purchase a tap are not unheard of, and the brewers who pay up will inevitably have to put their fastest selling beer on in order to recoup their investment.

“What you end up with is a standard tap list everywhere you go, which is just paying lip service to craft beer,” he said.

He stressed that he is just “raising a little red flag” in the hope that the industry considers the direction it is heading in.

“I love craft beer and I’m very passionate about getting craft beer into the hands of every consumer,” he said.

“I see the potential in this developing to be a problem, if we’re not aware of it in the early days.”

Mazen Hajjar also spoke to Radio Brews News recently. You can listen to that interview here.

5 Responses to Buying taps just plain wrong: Mazen Hajjar

  1. Michael Blair on August 29, 2015 at 3:43 pm

    Wine Equalisation Tax (WET) attracts a lower tariff, as it effectively subsidises the commercial pressures of running an agricultural business.

  2. John LATTA on August 19, 2015 at 9:35 am

    Totally agree with the comments, but market reality is that the government is not taking any meaningful steps to stop the practice and we are seeing entire chains of pubs locked up with 100% contracted taps to the major Brewers or crazy limitations that make any other options inhibitive for the venue. We’ve got situations in our home state that close to every single major multi venue group has some form of contract. As a brewer we can sit back and continue to wait for the government which for years has been hassled to make change, or try and compete by playing the game. It’s not a great position and is costly for the small brewer and as an industry we need to make a greater noise. The government should be helping small business, but instead is allowing big Brewers to lock us out. This also stretches to strong arm tactics employed by big Brewers Pressuring venues to take their new brands or risk loosing access to other core brands in their portfolio…..e.g. One new beer brewed in Central NSW , this further locks us all out and creates a massive gap that is hard to bridge. In other industries and categories this would all be seen as predatory behavior which attracts large fines.

  3. Jamie on August 18, 2015 at 10:01 pm

    Sorry – completely disagree. In a market where the numbers of suppliers/Brewers is increasing rapidly, Brewers beed to use what ever tools necessary in order to build distribution and consistency of sales. The $3.5k (mentioned in article) investment in a fixed tap point, might only represent 10% of revenue (or 10% discount) for a premium beer that sells 2 kegs a week. As a brewery if you are not in a position to fund a 10% discount for a targeted tap position, you need to seriously re-asses the profitability of your business model. I don’t see how more breweries using this approach will create ‘standard lists’, surely the more breweries that are willing to invest and fund this type activity, the more choice the publican has when deciding what beers to put on, and thus more choice for consumers.

  4. Miro on August 17, 2015 at 5:07 pm

    This is an interesting opinion piece. My concern is that it doesn’t set about to prove that “buying taps” is in fact “wrong”. You discuss convincing anecdotes. But the plural of “anecdote” is not “evidence”. We are no closer to any facts here. And I dont think a small brewery needs to be reprimanded for buying taps.
    “Big Brewery tactics” is a good term to demonise a currently legal practice. A practice, although under review by the ACCC, is a practice carried out by many beverage producers. Ask about coffee machines or fridges and you will see many other suppliers of great and not so great drinks also provide fixed points for certainty of ranging.
    There are many legitimate practices by the “big guys” and I believe many small breweries intend to grow and become big themselves. I would suggest anti “big” is not a solid growth strategy for a brewery. Especially when it comes to beer quality.
    Competition helps us improve, as does stability, and contract taps offer that to a brewery AND the venue.
    Does this little red flag come with any statistics?
    Is this just a matter of “contracts are bad” because as a community we’ve been saying it forever?
    Where is the other side of this discussion?
    Where is the research that says that buying taps, is in fact wrong?

    * For the sake of avoiding “ad hominem” debate. I have worked in venues that do contract taps and ones that wont, i have worked for beer suppliers who will not contract and I currently work for one that does.

  5. Colin on August 17, 2015 at 4:35 pm

    Mazen Hajjar:
    Do you think the bigger main stream brewers are scared of what the craft beer scene is doing to their bottom line. [Earnings]
    I’d rather drink Craft beer any time than the big brands.
    And I haven’t bought any of their product for many years now
    Where as Craft Beer has character & soul. their products have none.
    Long live Micro Brewerys & Craft Beers.

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