AB-InBev buys online retailer BoozeBud

Australia’s big retailers will probably cry blue murder behind closed doors now that AB-InBev’s unit ZX Ventures has acquired the local online beer retailer BoozeBud. But there is nothing they can do about it. The transaction was announced on 1 August 2018.

Andy Williamson, Alex Gale and Mark Woollcoot set up BeerBud in 2014 to sell local craft beers over the internet, before changing its name in 2015 to include an array of wines, cider and spirits. Also, in 2015, BoozeBud launched a crowdfunder to raise AUD 25,000 (USD 20,000), allegedly to source “hard-to-find” beers from around the world. However, the campaign failed to reach its target.

Ironically, in 2017 BoozeBud was one of ten start-ups chosen by AB-InBev’s local rival Lion to enter into its 12-week industry accelerator programme “Unleashed”, media reported. The scheme provides know-how and funding to participants. Obviously, BoozeBud’s team learnt enough to now sell their company to AB-InBev for an undisclosed sum.

BoozeBud says that it works with 400 suppliers – brewers and wineries – in Australia and already offers same day deliveries in Sydney, a service it plans to roll out in cities like Brisbane and Melbourne soon too.

Following the acquisition, BoozeBud’s founders will continue to run the business “for the long term”, hoping to build one of the leading online alcohol sites in Australia.

Online alcohol sales in Australia are small but growing. Already, online sales are estimated to account for approximately four percent of total liquor retail sales in 2018, says IBIS. Incidentally, the largest alcohol retailer Woolworths with a market share of 50 percent launched its own Endeavour Marketplace, an online sales portal to support its own liquor chains, only 24 hours before AB-InBev bought BoozeBud.

This is not the first time AB-InBev has ventured into retailing. Its ZX Ventures previously took over the UK’s online retailers Beer Hawk and drinks specialist The Atom Group. It also owns the US homebrew supplier Northern Brewer Home Brew Supply and Midwest Supplies.

The move follows AB InBev’s other acquisitions in the Australian beer industry. After merging with SABMiller in 2016 and taking control of the largest Australian brewer, CUB, the company purchased two craft brewers in 2017: Sydney’s 4 Pines and Adelaide’s Pirate Life.

Australian craft brewers, who do business with BoozeBud, are divided, local media say. Some will wait and see what happens, whereas others will no longer be using the platform because of the change in ownership.

There are concerns of ZX Ventures gaining access to BoozeBud’s sensitive data, such as sales and pricing, and sharing it with CUB. ZX Ventures was quick to refute such allegations.

Others worry that AB-InBev will use BoozeBud to sell more of its Goose Island beers, thus blurring the lines between independently-owned craft beer brands and crafty ones.

Many fear that independent craft brewers, especially the smaller ones, who used online retailers as their route to market, will find this access clogged or even barred.

Generally, there is apprehension over AB-InBev growing market muscle, especially in relation to its vertical integration of breweries, retailers and bars. One commentator was quoted as saying: “The more AB-InBev get into retail the more dangerous it will be. They are beholden to their shareholders to make money and the fact that commercial beer has been declining means they’ve been snapping up as many craft breweries as they can. They don’t give a shit about craft, they give a shit about their bottom line and investors. So, this is ultimately just another way they can try and control craft beer better for themselves.”