Persuading Malaysians to drink craft beer is an uphill task

By Richard Whitehead

- Last updated on GMT

'There are people in Malaysia who are now looking for craft beers, but still it’s a very niche market,' says Alvin Lim
'There are people in Malaysia who are now looking for craft beers, but still it’s a very niche market,' says Alvin Lim

Related tags: Beer, Craft beer, Malaysia

As the craft beer scene blossoms in Southeast Asia, one holdfast nation continues to lag behind its neighbours.

For many beer lovers, Malaysia is almost entirely a wasteland, with the same standard taps on display at just about every bar in the country, and next to nothing that is outside the mainstream.

Only three companies have licences to brew beer in Malaysia and two of these are active: Heineken and Carlsberg. According to the Confederation of Malaysian Brewers, the two majors account for 95% of the beer and stout total volume in the market.

If you see a selection of Heineken, Tiger and Guinness, the venue you are in is aligned to Heineken Malaysia. Bars serving Carlsberg, Kronenbourg and Connors Stout are supplied by Carlsberg Malaysia. You will on occasion see other names, such as Strongbow, Kilkenny or Asahi, but these brands are all part of the big two breweries.

A beer duopoly

Being an effective duopoly, the global brand owners are extremely tight in allowing anything outside their portfolios to be promoted, especially when it is on tap. The contracts their bar customers sign are very clear about what can be done with third-party brands. As a result, Malaysia is a long way from witnessing a craft revolution.

When you’re a customer you don’t really know any better​,” lamented Alvin Lim, who has spent the best part of the last decade trying to bring craft beer into the mainstream as a bar owner and distributor in Kuala Lumpur.

He argues that drinkers are happy to guzzle Guinness or Tiger, Malaysia’s most popular brew, without thinking too hard about there being other options.

If you don’t know any better, then you wouldn’t know you’re not getting a decent beer, right?​” said Lim, who co-founded Taps Beer Bar in Kuala Lumpur and craft beer distributor MyBeer.

“Everyone is travelling the world now, and people start learning. There are people here who are now looking for craft beers, but still it’s a very niche market in terms of spending power​.”

Beer pairings and beer tastings

What Malaysian beer drinkers need is more education about craft, Lim believes. Everyone with a commercial interest should be following MyBeer’s lead and setting up a calendar of events, like beer-pairing dinners and tastings, to tempt newcomers.

But there’s no one voice that is big enough to say: 'hey, let’s do this.'​”

Lim founded what is now Taps Group eight years ago with his cousins. They reasoned that since they spent so much time drinking in bars, they should own their own. They just needed a hook to make their venture stand out.

Living in Melbourne, Lim’s cousins had grown accustomed to Australia’s booming craft scene. Together they decided to open a bar in the Malaysian capital where only craft beer is available.

Taps Beer Bar, on the periphery of the Bukit Bintang nightlife area, soon opened and for the first 10 months it was a struggle to attract a wider base of customers. Facing disaster, the cousins managed to get some last-minute financial support from relatives. They marked this lifeline by putting on the first edition of what for several years would become Malaysia’s best known beer festival.

Until it was forced to cancel in 2017 following what was seen as a religiously motivated move by Kuala Lumpur City Hall to block its licence application, Lim’s Better Beer Festival had built up a strong following each year and introduced countless Malaysians to craft beer.

It was while putting on one of these events that the partners decided to branch into craft beer distribution, and set up MyBeer, their vehicle to do so.

MyBeer: Building up BrewDog and other brands

At one point the distributor was importing 150 different beers, but it has since tightened its focus. Lim says he has succeeded in building a market for Scotland’s BrewDog in Malaysia, and is now particularly keen to do the same with Young Master, a Hong Kong craft brand that has become wildly popular in its home market.

There is a lot of smaller breweries that need to export. They can’t find space on taps or on the supermarket shelf in their own areas, so the only way to turn around their volume is to export​. When they come to us, we can have a say in how they go about this,” ​said Lim.

“What are their terms, what is their marketing support, will they give us more cases for tastings and launch events? We can discuss all this if they have a plan. But if they are looking straight up for sales, then I’ll give them some other guy’s number​.”

In terms of distribution, supermarkets accounts for a large share of craft beer sales, as does foodservice.

A lot of the beers are distributed into restaurants and cafes, while fewer go to bars because of the barriers to entry put up by the big breweries.

That’s because restaurants and cafes do not have contracts with these guys. All the newer restaurant owners aren’t so much into putting Carlsberg on tap—those days have changed now and they are looking for craft beers​,” said Lim.

Build familiarity

Though the number of craft importers continues to rise, bringing in beers from new breweries in Australia, New Zealand and America, not many are driven to build up their brands from scratch, which Lim believes is a mistake.

You want people to keep on drinking craft beer, so you have to build familiarity, but this is not happening. They just sell it in their shops; they don’t do road shows and show it off​,” he said

We’ve been working with different breweries for eight years, but we don’t really see anybody else wanting to build a brand​.”

BrewDog, however, is happy to take this approach. For every ringgit MyBeer spends on promotion, the Scottish brewer will match it. Young Master also plans to provide a good level of support when it signs with Lim. Though Japanese Hitachino can do no more than offer very good pricing and credit terms, it is meticulous about settling its accounts and is developing quite a following.

It still feels like Lim and his cousins have more battles ahead as they continues developing a market that did not really exist before they arrived on the scene. There is still a lot more work still needed before Malaysia can emerge from being a beer wasteland, one new craft drinker at a time.

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

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