ALCOHOL POLICY

Liquor industry ‘must tackle critics head-on’ Frustration has been expressed at the industry’s failure to capitalize on indisputable evidence that Australians are drinking less, despite what the vocal anti-alcohol lobby would have the public believe. Former ALSA president Mal Higgs maintains that, in the absence of the liquor industry having a united counter argument, anti-alcohol campaigners are winning the debate in the eyes of the media and the eyes of the consumer. He pointed out that the latest ABS figures once again showed per capita alcohol consumption had fallen, this time by 2.6 per cent on the previous year. ‘Yet all we hear is all the negativity and all the bad news,’ Higgs said. ’It’s very frustrating that the industry is not prepared to use its significant resources to address this. There is so much each sector has in common.’ Higgs said he and ALSA CEO Terry Mott have spent nearly three years working to develop a united front for the liquor industry. ‘The existing forum – National Alcohol Beverages Council (NABIC) – has done an extremely good job for 25 years, representing the industry’s needs at a national level, however it has not got the resources needed to be as effective as it could be,’ he said. Some leadership from within the industry is needed to get the industry to pull together and address some of the negativity out there.’ [From The Shout, Jun 14, 2012]

BEER & BREWING: Australia – general

Grain group changes Glencore Inc is proceeding with its takeover of Viterra, with the Australian Competition & Consumer Commission (ACCC) indicating it will not oppose the move – however, further approvals from regulatory bodies in Aus, Canada and NZ are still required. So, it appears that what was Joe White Maltings will have yet another ‘off-shore’ owner. Glencore said on June 15 that it has agreed with Canada’s Minister of Industry to extend the review period of its proposed acquisition of Viterra, Inc. by an additional 30 days past the initial review period, which ended on June 18. Glencore said it remains focused on achieving all regulatory approvals, including those under the Investment Canada Act, in time for the closing of the transaction which is expected to be by the end of July. On May 3, Glencore learned that the Canadian Competition Bureau will not challenge the transaction. The U.S. statutory waiting period for antitrust review expired on the same day. Glencore received the support of Viterra shareholders for the acquisition on May 29 and on May 31 the Ontario Superior Court of Justice issued a final order approving the Arrangement under the Canada Business Corporations Act. [From Adelaide Advertiser, Jun 8 & E-Malt.comFlash Jun 20, 2012]

The butcher glass Of the many different names given to measures of beer throughout Australia, the most unusual is perhaps the ‘butcher’. This term, peculiar to South Australia, refers to a quantity of seven fluid ounces of beer, 200mL, and to the glass in which it is served. In most records its origin is attributed in some way or other to the Adelaide meat trade. However, some recent in-depth research indicates that perhaps the name came from a German word for a drinking vessel, ‘becher’, which would have been in common use in the nineteenth century among SA’s significant German-speaking population. The alternative theory, then, is that the word ‘becher’ eventually became ‘butcher’ and much later, when the true origin of this mysterious beer-drinking term had been forgotten, the elaborate stories about meat-workers were conjured up to explain its existence. Thus, despite popular belief, the origin of the butcher glass probably has nothing at all to do with meat-workers … perhaps many ‘old-timers’ will be disappointed that this myth may have been busted. [From Australian Brews News, Jun 13, 2012]

BEER & BREWING: Australia – mainstream breweries

Casella’s & The Perfect Lager A newcomer to the ‘mainstream’ sector with 300,000hL projected capacity and the stated aim of ‘taking on the big boys’, Casella deserves, on paper at least, to be thus classified. It has officially launched two new beers, Arvo 34 and Arvo 51, declared the brewery open for business and now asks drinkers to show a preference for one or the other. Six-packs containing three bottles of each beer went into national distribution on June 15 at RRP $18.

Targeting the 25-34 year-old male bracket, Arvo is a brand aimed squarely at the Australian market and Australian tastes. Media comments about the launch of the new brewery and two Arvo beers, for which occasion representatives of the nation’s liquor media were flown to Griffith were supportive with the lager-style beers described as easy-drinking, uncomplicated and thirst-quenching. Speaking at the launch MD John Casella said the Australian brewing industry is ten times bigger than wine in volume terms, yet there are just two major producers [Coopers probably will not like this statement! Ed]… ‘Look at the wine industry, how competitive and diverse that is in comparison to the brewing industry’ he said. ‘We felt strongly that there was an opportunity to take advantage of that as far as what we could offer consumers. We [can] produce our style of beer and do it competitively, versus somebody that’s freestanding.’ Casella beer sales manager, Ray Ritenis said Australian beer consumers are ‘crying out for something different’.

So it will be a case of ‘watch this space’ as the voting is set to close in approximately eight weeks time, giving the company time to decide what they will do with The Perfect Lager. There is, however, a possibility that both beers will be retained. [From Beer & Brewer Jun 15 & The Shout Jun 15, 2012 & other sources]

Coopers In a sexual harassment case involving a contract cleaner and an employee at the Regency Park brewery, the court has sent the parties to mediation and adjourned proceedings until July. [From Adelaide Advertiser, Jun 13, 2012]

Lion On June 13 Lion announced that it will start brewing Guinness and Kilkenny brands in Australia from November 1, snatching them from SABMiller-owned Foster’s, ‘The brands strengthen our leading international premium portfolio, with Lion now offering six of the top ten beers in this fast growing segment,’ James Brindley, MD, Lion Beer, Spirits and Wine in Australia, said. Lion will manage the Australian brewing of Guinness Draught, Kilkenny Draught and Extra Stout, as well as the distribution, sales and marketing for both brands in all existing formats, in line with Diageo’s global brand activity. Kirin is Diageo’s distribution partner in Japan, and Lion currently manufactures and distributes Guinness and Kilkenny in New Zealand through a pre-existing relationship with Diageo. In some ways, the ‘wheel has come full circle’ as, in the 1960s Guinness was first brewed in Australia by SA Brewing Co Ltd in Adelaide and later in the 1970s by Tooheys Ltd in Sydney; both companies are now units of Lion. Lion said Foster’s would continue producing Guinness and Kilkenny in Australia until October 31. [From E-Malt.comFlash 24a, Jun 13, 2012]

BEER & BREWING: Australia – craft & smaller breweries

National: Lion bids for LWB On June 18, in a surprise announcement, Lion confirmed an agreement with the board of Little World Beverages to acquire, by way of a Scheme of Arrangement, the 64% of shares in LWB it does not already own. Under the Scheme, Lion will offer LWB shareholders $5.30 per share in cash, subject to the successful implementation of the Scheme. The cash of $5.30 per share will be reduced by the amount of any dividend declared by LWB prior to the Scheme becoming effective. This offer provides a highly attractive outcome to LWB shareholders and values the total LWB enterprise at $381.6 m. The LWB board recommends the Lion offer to shareholders.

Initial general reaction suggests that there will be little ‘deleterious’ change and that closer association with Lion will give the Little Creatures brand even better exposure and distribution. Rob Murray, CEO of Lion, says the deal is a compelling one for LWB shareholders. ‘Lion has a long history of supporting the business and we believe there is now a fantastic opportunity through Lion’s scale distribution system to get these great brands to more beer lovers, while respecting the craft brewing ethos of the LWB brands, breweries and hospitality venues.’ The takeover price of $5.30 a share was at a 49.6% premium to the six-month VWAP and sent shares soaring by 36% to $5.16.[From Australian Brews News, Beer & Brewer & The Shout, Jun 18 & Adelaide Advertiser, Jun 19, 2012]

Media coverage It wasn’t too long ago that appearances of craft beer in the mainstream media were rare and to be cherished. And, while there’s hardly wall to wall coverage now, things are certainly picking up. Outside of the regular and semi-regular beer columns found around the traps, signs are increasingly positive. In the past week alone, there’s been a minor torrent. …. [quoted from The Crafty Pint, Jun 8, 2012]

[In fact, it’s becoming difficult to even attempt to keep up with all that is happening in the craft sector. JH.]

A lasting peace? A recent review suggests that really there is no craft beer war and craft brewers of all persuasions are on general pulling together to ‘enhance and improve the stature of the craft market and their brews by simply making quality beers.’ Hopefully, this is substantially correct and, although there are some who see and emphasise a big divide between the big and small craft operators, most agree that brewers in the overall category should all have the same objective – to bring great quality, interesting beers to market. Whilst craft brewers have a role in shaping the category, in the long run it is the drinkers who will be the judges. [From National Liquor News, Jun 2012]

Tea beer A beer initially developed for an Australian beer festival by Yeastie Boys of Wellington NZ, Gunnamatta India Pale Ale was inspired by Australian music in some way. Named after a beach surf-break on the southern coast of Victoria’s Mornington Peninsula and popularized by Paul Kelly’s song of that name, Yeastie Boys considered many ideas for this beer – using tea was one. Gunnamatta will be available in Australia from early July, through Innspire Pty Ltd. Technical information: Malt: Golden Promise Pale Malt, Carapils, Caramunich, Wheat; Hops: Pacifica, Motueka, Southern Cross, Pacific Jade; Tea: Earl Grey Blue Flower from t leaft T; Yeast: “Chico” (US ale). Alcohol: 6.5% abv; Bitterness: 52 IBU. [From Australian Brews News, Jun 8, 2012]

NSW: Rocks Brewing Co has turned to10 investors ‘to help build the brewery in order to boost margins and build a network to increase distribution along the east coast’. Rocks Brewing founder Mark Fethers aims to repurchase the stock for a five-year exit. [From Adelaide Advertiser, Jun 11, 2012]

Stone & Wood has made a limited release of Jasper Ale, the third beer in its permanent range. [From National Liquor News, Jun 2012]

WA: Due for release in late June is Little Creatures Long Shadow Spiced Winter Ale in which ‘Christmas hints of allspice, cinnamon and nutmeg play with a yeast primed with dark muscovado sugar delivering ripe fruit, molasses and delicate spice. UK Sovereign and Challenger hops provide a gentle, lasting bitterness that carefully balance this deep red ale rich in flavour and complexity.’ Following a trend to offer more technical data, the following is available: 8.9% abv, 40 IBU, colour 60° EBC. Brewed with Pale Ale, Abbey, Medium Crystal, Dingemans Special B (Belgian Crystal) and Light Chocolate malts and conditioned with Belgian Candi Syrup D2. and Dark Muscovado sugar (Barbados Sugar). Spiced Winter Ale style – filtered bright but not pasteurized; recommended serving temperature 8 – 12°C. Available nationally in 30 & 50 L kegs & cartons of 12 x 568ml bottles. [From Australian Brews News, Jun 16, 2012]

WA’s largest locally owned brewery, Feral is utilizing its AIBA success to expand its brewery capacity. The new plant is in response to an increased demand for its beers in the wake of consistently good results on the awards circuit. Located in Bassendean, the new system will allow Feral to increase their capacity from 4,000hL per annum to 25,000hL, allowing the brewery to increase distribution and better supply the Eastern States. Head brewer Brendan Varis remarked ‘It is fitting that the growth has come in our 10th anniversary year, as it that Australians are more adventurous then most people think as they have embraced our unique range over the past decade.’ [From Beer & Brewer, Jun 20, 2012]

BEER & BREWING: International

California tour In September, beer lovers can take advantage of an eight day small coach tour, departing San Francisco and finishing in San Diego, taking in the California Beer Festival and visiting selected regional craft breweries. [From Adelaide Sunday Mail, Jun 17, 2012]

Rise of premium beers The global premium beer market is set for growth over the coming four years, according to a recently-published industry report. Total global premium beer sales are forecast to rise to 393m hl in 2016, from 340m in 2011, representing a compound annual growth rate (CAGR) of 2.8%. With all the major brewers ‘convinced of the merits’ of pursuing a premium strategy, the report forecasts growth in premium beer on every continent. Understandably, given the economic situation and the relative maturity of some markets, European premium beer sales are forecast to show only sluggish growth of 1% per year over the next four years, with sales rising from 191m hl in 2011 to 200m in 2016. {From BelgianShop WeekLetter 1468, Jun 21, 2012]

BEVERAGES: General

WINE & SPIRITS

Best shiraz Kellermeister Wines, based at Lyndoch, SA, collected three trophies at the International Wines Challenge in London with its Wild Witch Shiraz, including that for best international shiraz. At the world’s largest wine competition 400 judges this year assessed more than 12, 000 wines from every important producing region. Winery boss Mark Pearce said ‘This win is incredibly exciting for Kellermeister and our winemaking team … but it’s also a wonderful win for Bariossa shiraz.’ [From Adelaide Advertiser, Jun 21, 2012]

Concern re ‘own brands’ Liquor retailers are flooding the market with ‘buyer’s own’ or private label wine brands, posing a huge threat to the Australian wine industry, warns Ross Brown, chairman of Australia’s First Families of Wine (AFFW). Speaking after an AFFW event in early June, Brown said ‘There’s been almost an avalanche of buyer’s own brands coming onto the market over the last few years. People aren’t thinking it through long-term. They’re just buying what would normally be surplus wine and sticking a label on it and that’s masquerading as something of higher value. At the end of the day if they are not supporting brands like AFFW, the industry doesn’t have a long-term future. Brown, executive director of Brown Brothers, said private label products are clearly impacting on Australia’s iconic wine producers. [From The Shout, Jun 6, 2012]

Grants for wineries One NSW/Vic winery and three WA wineries have won a total of $5.4 million in energy reduction grants from the Federal Government. The four wineries took the majority value of the first 13 grants from the Gillard Government’s $1 billion Clean Technology Investment Program, which aims to help manufacturers reduce their energy bills. The initial grants, worth $8.1 million, will help businesses install over $23 million of energy efficient equipment. De Bortoli Wines was awarded $4,829,405 to implement energy reduction projects at five sites in NSW and Victoria across its winemaking, packaging, warehousing and site services areas; the initiatives include more efficient use of grid power, replacement of old equipment and use of solar technology. Ferngrove Vineyards of Frankland River, WA, was the other big winner, taking $446,390 to install a solar power system at its winery. Two other winemakers based in Denmark, WA, were also awarded funding for solar power projects: Rickety Gate Trust won $67,887 and Matilda’s Winery $40,643. [From The Shout, Jun 8, 201

‘Shonky’ marketing again SA winemaker Henschke Wines (Barossa Valley) is considering legal action following the detection of a fake Hill of Glory brand that has appeared in China (Henschke is famous for its Hill of Grace premium red wine which retails at over $300 per bottle). Earlier examples of fake Aussie wines in China include finding Benfolds wine in packaging similar to Treasury Wines Estates long established and internationally known Penfold brand in 2010. However, local legal experts say that Henschke will find it impossible to take action as China dies not recognize intellectual property. [From Adelaide Advertiser, Jun 18, 2012]

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FROM PAST DIGESTS … 5 YEARS AGO

Foster’s Group to cease production at North Fremantle Brewery Foster’s Group Limited will cease beer production at its North Fremantle brewery by the end of September 2007, with production shifting to other Foster’s sites. Marketing and support and a home for Foster’s in WA will remain at the North Fremantle site. This decision is the result of an Australian production review to improve cost and capital efficiency, operational flexibility and health, safety and environmental performance. David Grant, Director Global Beer Production, said that it was a difficult decision but ‘a combination of improved efficiency and flexibility has led us to shift production to other sites. The beers and philosophy behind Matilda Bay will not change and Chief Brewer Brad Rogers will remain at the helm of Matilda Bay and continue the proud tradition of craft beer innovation and creativity’. [from E-Malt com.Flash 26a, June 25-27, 200 & press release June 27, 2007]