Craft brewers aim for greater market share
Independent craft brewers have set themselves a lofty growth target: they seek to control 15 percent of the beer market by 2015, up from nine percent today. If the US can serve as an example, the target appears not all that ambitious considering that the current level includes all the “crafty” beers too. Australia’s 520+ indies only account for two percent of beer sales.
Still, Australia’s Independent Brewers Association (IBA) thinks that the “indies” are on track to keep on growing. Thanks to lobbying hard, the IBA managed to wrangle from lawmakers an increase to the Australian Alcohol Manufacturing Refund, an excise rebate, to AUD 100,000 (USD 74,000) annually from 1 July 2019.
The Australian beer excise regime is byzantine. Some years ago, Australia adopted a lower excise rate for beer sold in kegs of more than 48 litres; excise paid on packages (bottles, cans) and smaller kegs is higher.
In May 2018, the law was changed so that all brewers can continue to claim rebates under the alcohol excise refund scheme, plus as of 1 July 2019, they will be able to claim excise back also on smaller kegs (from 8 to 48 litres), with the total amount per annum capped at AUD 100,000. At present, the rebate is not applicable for kegs under 48 litres and the rebate cap is AUD 30,000.
The IBA applauded the Treasurer’s concession, calling it a “tax relief” as it will benefit the small brewers who on the whole favour small kegs. Cynics, however, say that the country’s Big Brewers can also use the smaller kegs as well as foreign Big Brewers, who would have seen the 50-litre kegs and their tax implications as an artificial barrier. Nothing can stop them now from flooding the Australian market with international draught beers in smaller kegs.
We do not know how much beer a brewer has to sell to qualify for maximum rebate. Our correspondent in Australia, John Harvey, reports that the craft brewer Capital Brewing near Canberra, for example, has announced that it will invest the extra AUD 70,000 excise rebate gained annually towards community projects. Capital Brewing’s beer output is no more than 10,000 hl per year, sold mainly in draught at its taproom, although they do have some beers in cans.
Over the years, various state governments have realised that craft brewers are not just contributing to their economies through jobs and taxes. They also act as tourist attractions. Most recently, the Queensland government promised it would develop a Craft Brewing Strategy, aka some sort of funding programme. The strategy will be finalised in late 2018. However, the government only signalled its support for local craft brewers after it was revealed that it had “supported” Scottish brewer BrewDog though monetary incentives to establish an AUD 30 million (USD 22 million) brewery in Brisbane.
Another recipient of a million-dollar government grant is Adelaide’s brewer Pirate Life, which was sold to AB-InBev in 2017. It has secured AUD two million in funding from the South Australian government for its new brewery and bar venue in Port Adelaide, which will see the creation of more than 80 new jobs and is scheduled to open in December this year.
