ACCC Releases Findings of Investigation into Craft Beer Industry

Friday 14 July 2017 @ 10.16 a.m. | Legal Research | Trade & Commerce

The Australian Competition and Consumer Commission (ACCC) has revealed it has conducted an in-depth investigation into the contracts of Carlton United Breweries (CUB) and Lion Pty Limited (Lion) after allegations from some craft brewers that the major brewers were locking them out of beer taps in pubs, clubs and live venues through the use of exclusivity provisions and volume requirements.

Background to the Investigation

The ACCC investigation examined contracts and practices at 36 venues across NSW and Victoria and found that their impact is unlikely to substantially lessen competition in any of the markets we investigated. However, the competition regulator says it will continue to closely monitor conduct and developments in the market.

The complaints from craft brewers stemmed from some of Lion and CUB’s contracts requiring venues to dedicate over 80 per cent of beer taps to their big name brands in exchange for rebates, infrastructure investment and refurbishment loans.

Some venues purchase draught beer without a governing contract, and these were not part of the investigation. The ACCC also considered 33 contracts from small brewers and 140 from Lion and CUB.

A number of small brewers reported that they have been able to access venues that had contracts with a major brewer by selling both draught and packaged beer. Some noted successful entry after a marketing plan created brand awareness and consumer demand for their draught craft beer.

Reaction from the Industry Association

Brewer and Chair of the Independent Brewers Association (IBA), Mr Ben Kooyman, said:

"We've approached venues and been told that they've been fully contracted … One supplier has effectively locked out another supplier in, perhaps, pale ale … we assume there is exclusivity on the taps."

Mr Kooyman was not surprised, but he was disappointed by the findings of an investigation he said started more than three years ago: "it's a little bit bewildering to honest".

Comment from the ACCC Deputy Chair

ACCC Deputy Chair Dr Michael Schaper said of this issue:

“Although some venues had exclusivity arrangements, most pubs and clubs said they did not feel constrained from allocating taps to smaller brewers and could make taps available for craft beer if necessary. Some contracts included minimum volume requirements that could make it harder for craft brewers to gain access to taps in these venues. 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. In fact, over half of the venues contacted by the ACCC indicated that customer preference was the key factor in determining the brands, types of beer and number of craft beers offered by the venue … There has been a significant growth in craft beer sales during the ACCC’s investigation and we will continue to monitor for anti-competitive behaviour.”

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Why craft beer brands are struggling to find a place at the taps –

ACCC releases findings of beer taps investigation – ACCC Release MR 110/17

Australian Craft Beer Industry Association - Position Statement


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