Craft in a froth after watchdog decides not to pursue beer majors

By RJ Whitehead

- Last updated on GMT

© iStock
© iStock

Related tags: Brewery, Accc

The craft brewing industry has hit out at Australia’s competition watchdog’s decision not to take action against beer majors over distribution contracts that they say shut them out of pubs and clubs.

The Independent Brewers Association​ described the move as a “body blow​” for its members after the Australian Competition and Consumer Commission's refused to pursue Carlton United Breweries and Lion after a three-year investigation. 

The ACCC had been probing allegations that had locked craft businesses out of venues by issuing exclusivity provisions and volume requirements in their contracts with pub and club owners.

It investigated tap contracts at 36 venues across New South Wales and Victoria but assessed that these were unlikely to “substantially lessen​” competition even though volume rules and exclusivity arrangements were found to be in place.

Craft brewers had previously complained that some of Lion and CUB’s contracts required venues to dedicate over 80% of their beer taps to their big beer lines in exchange for rebates, infrastructure investment and refurbishment loans.

IBA chairman Ben Kooyman said the ACCC’s finding was at odds with a separate study that found market access was the second greatest constraint to growth behind excise.

This investigation has been dragging on for more than three years and to now find out that the status quo will be maintained is a bit hard to take​,” Kooyman said. 

The big winners from this decision are a select group of multinational companies​.

For any small business to survive it needs protection from the market practices of dominant players. We had hoped that Australian consumer law, as interpreted by the ACCC, would be able to provide that protection​.”

The major brewers maintained that the range of taps and brands stocked by pubs and clubs was determined by consumer demand, not restrictions.

The competition watchdog said it would continue to monitor conduct and developments in the beer market.

Its deputy chairman, Michael Schaper, said that most venues were not prevented from allocating taps to smaller brewers.

While some craft brewers may have been refused access to taps by certain venues, our investigation found that the venues were responding to consumer demand for certain beer brands, rather than restrictions imposed by the big brewers​,” he said.

Related topics: Beer, Wine, Spirits, Cider, Beer, Craft

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