Sale no surprise

01:34, Nov 16 2012

Having known Richard Emerson for almost 20 years, I must confess I was a little sad and disappointed when I heard the news last week that the brewery he started with his father in 1993 had been sold to Lion. Although I was sad, I was not surprised; the Dunedin brewery has been an increasingly attractive target for takeover for many years.

For Lion it was always going to be a matter of market share: New Zealand's big brewers have been eyeing the stellar growth of craft beer in this country and Lion finally decided it was time to grab a slice of the pie.

Having taken that decision Lion was then faced with a choice; either to buy an existing successful craft beer brand, or to attempt to develop its own. While the latter option was fraught with uncertainty - craft beer drinkers are both savvy and suspicious of large multinational breweries, and establishing a new craft beer brand would have taken considerable effort and time - the former was a far less risky option.

With an excellent portfolio of beers, healthy ever-growing sales, and unrivalled reputation within the craft beer sector, Emerson's was always going to be a target for a predatory large brewer. And so it turned out. The latest discussions between Lion and Emerson's began late in 2011, but were preceded by several previous approaches by different brewers over the past decade.

The sale also makes perfect sense from Emerson's point of view. The directors and shareholders that I've encountered over the years have always struck me as being solid, level-headed people but, truth be told, many of them are of, or approaching, retirement age. As Emerson's has grown, the cost of financing two decades of non-stop expansion must have taken its toll on them. With the company investing heavily in more stainless steel vessels, dividends to shareholders have been rare and minimal, and a lucrative offer from Lion must have seemed irresistible. I don't begrudge them one cent of their payout.

But what are the prospects for those of us who enjoy drinking Emerson's beers? As soon as news of the sale broke social media erupted with questions from Emerson's drinkers about the future of the much loved brewery and its beers. Would Lion start using inferior ingredients to cut costs? Would production be switched to Auckland?


If the brewery's latest media release is to be believed, not in the short term at least. Richard Emerson, general manager Bob King and brewing manager Chris O'Leary will retain the day to day running of the Emerson's operations.

In the same media release Richard Emerson assures drinkers, "It is business as usual for Emerson's - the taste, integrity to style, quality and consistency of our beers will remain the same. Lion's ownership allows us to continue doing what we do well - experimenting and brewing great beer. We will now have the backing to help us to realise our growth aspirations".

"But for how long?" the cynics will ask.

That question can only be answered in time, but my view is that Lion is too smart to tamper with Emerson's winning formula and won't want to risk devaluing its considerable investment in the brand. And to those scaremongers who point to Mac's as an example of Lion's destructive power, I'd argue the opposite. I believe Lion has improved the Mac's beers beyond all recognition.

Since buying the brand, Lion has increased the Mac's range from just three comparatively bland lagers - Mac's Gold, Black Mac and Mac's Real Ale (the latter was a simple blend of the Gold and the Black) - to seven. I'd also point out that fine beers like Copperhop, Hop Rocker, Sassy Red and Great White were all designed and released after Lion took over. Bottom line; I'm far more likely to buy a six pack of Mac's beer today than I was before Lion's purchase of the brand.

And if you're thinking that because Lion abandoned Nelson, Mac's spiritual home, they're just as likely to shift production of Emerson's away from Dunedin, I'd disagree again. When Lion bought Mac's it purchased just the brand, not the Nelson brewery, but in the case of Emerson's Lion has also bought the Dunedin brewery lock stock and barrel(s).

A good example of Lion's commitment to its iconic brands would be the Speight's Dunedin brewery.

Before the Canterbury earthquakes the Dunedin brewery was brewing only small amounts of keg beer for the local Otago market - all of Speight's packaged beers came from Auckland and Christchurch - but Lion never closed the famous old brewery. That's got to be a good omen for Emerson's.

At the end of the day only time will tell, but I see no reason to be anything but optimistic. I'll continue to rate the beer on the basis of what's in my glass, not who brewed it and look forward to being able to enjoy Emerson's beers in parts of the country where craft beer has previously been unavailable.

In the meantime I congratulate Richard and his team for all they have achieved and look optimistically to the future. Cheers!

The Marlborough Express