Big business getting crafty in profit fight

GEOFF GRIGGS
Last updated 09:34 26/11/2012

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Judging by the passion and vehemence expressed in many of the comments posted online since the news broke that Dunedin craft brewer Emerson's has been sold to Lion, it seems New Zealand's growing band of craft beer drinkers value provenance and authenticity very highly. I think that's great.

What I'm more concerned about is the way large, multinational brewers are bringing new beers to the market that have been designed to look like they've been made by some, small independent craft brewery. In New Zealand, three giant foreign-owned brewers dominate the market: Lion, which is owned by Kirin of Japan, DB, by Heineken of Holland, and Independent Liquor, by Asahi of Japan. Each has been working hard to muscle in on the craft beer category, the only expanding sector of the beer market.

With six packs from Speight's and Mac's (both Lion), Monteith's (DB) and Boundary Road (Independent) already well established in Kiwi supermarkets and liquor stores, we're now seeing new variants in large size "craft lookalike" bottles jostling for shelf space with single bottle beers from the smaller craft producers. And I'm sure there are plenty more on their way.

While I have nothing against many of these beers per se - indeed some are worthy examples of the styles they claim to be (which in itself is a sign of progress in a country where the big brewers have traditionally misled consumers by labelling their mainstream amber and dark lagers as ales) - I do take issue with the ever growing number of mundane and otherwise unexceptional products being passed off as "craft" and sold at premium prices.

And it's the same story on the other side of the Pacific. According to a report from CNN, "big, global breweries have taken notice of the craft beer movement - mostly because that's where actual growth exists in the otherwise stagnant beer industry".

The report notes "even though craft beer still accounts for less than 6 per cent of all beer sales, anyone remotely connected to the business knows it will play a big part in the industry's future. Craft beer delivers higher profit margins, it attracts consumer spending, sought-after clientele for bars and restaurants, and many people are passionate about craft beer, similar to the same way people are passionate about wine".

The same report also identifies a recent trend where the giant US breweries have introduced beers "that approximate the craft taste profile" and cites brands such as Blue Moon Brewing Company and Tenth & Blake Beer Company (both owned by MillerCoors), Green Valley Brewery (Anheuser-Busch) and Jacob Leinenkugel Brewing Company (SABMiller), whose products hide their true identity in an attempt to woo the craft-minded beer drinker.

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"The large brewers have been using a variety of tactics to basically try to capitalise on some of the mystique and success in the marketplace that craft brewers are having," says Paul Gatza, of the Brewers Association, a national trade group for America's small and independent brewers.

"That these labels don't proudly say Anheuser-Busch or MillerCoors on them is to some degree a chancy proposition. To some beer drinkers out there, they won't care. To others, they will care and probably won't feel so good if they feel like they were duped by the large brewers."

Greg Koch, the chief executive and co-founder of California's Stone Brewing Company, also argues against any intended deception: "Craft brewers are creative. We don't follow trends - we create them. We specifically went against the mass-homogenised, corporatised business model . . . When that very empire, the multinational conglomerate, starts giving the impression to unsuspecting consumers that they're a part of our world, of course that's offensive."

Another major issue in America that's also commonplace in New Zealand comes when big brewer marketing muscle is used to squeeze out beers from smaller producers.

"Anheuser-Busch can snap their fingers and the distribution network will get it on shelves and get it on tap handles and knock off other brewers who have been on those tap handles," says Gatza.

"In an ideal world, those decisions would be made by the beer drinker . . ." I'll certainly drink to that.

Although I've always advocated a beer should ultimately be judged by what's in the glass, as a consumer I still want to know where, by whom and with what ingredients it was brewed. I don't think that's too much to ask. Do you?

Cheers!

- The Marlborough Express

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