Asahi buys beer brand Cricketers Arms
Since Lion, Foster’s and even Coca-Cola Amatil are so heavily into craft beers, Asahi decided it did not want to be the odd one out. But rather than develop its own craft beer brand, at the end of April 2013 it decided to buy a brand that was already launched in 2009: Cricketers Arms.
Now Cricketers Arms is not a typical craft beer. Because many Australian commentators have called it a “session beer” – the usual put-down used by craft brewers for non-extreme beers – its creators have instead opted for the moniker “mainstream craft”. Whatever that is.
However, Cricketers Arms has a good story to it. The man behind the brand is the Melbourne entrepreneur and former publican Paul Scott, who has had Cricketers Arms contract-brewed at the Mildura Brewery (an outback town 500 km to the north of Melbourne) since 2009. He seems to have been quite good at brand building because today you can find the beer in most of the major liquor store chains.
A six-pack sells for about AUD 16 (USD 16.50), which is at the bottom end of the craft price range, yet in keeping with the product itself: Cricketers Arms’ CEO Paul Scott was quoted as saying: “Cricketers Arms was founded on the basis of having a beer with friends, family, workmates and teammates – we coined the phrase ‘Cricketers Arms lager, worth going out for’.”
A purchase price has not been disclosed. According to media reports, Mr Scott will stay on board and help grow the product range at Independent Distillers, as Asahi’s Australian unit is called.
While the Australian beer market has been in decline for years, craft beers and imports have grown in volume. Craft beers made by Australia’s 150 or so independent brewers nevertheless represent only a fraction of the market: 2 percent, or 6 percent if Coopers Brewery in Adelaide is factored in.
In recent years, several craft brewers have sought shelter under the wings of the country’s major brewers, most notably Little Creatures, which was snapped up by Lion in 2012.
It’s hard to tell if the tie-up between the major brewers and erstwhile craft brewers is beneficial to either. From what we hear, the integration of Little Creatures into Lion – instead of maintaining a separate platform for them – has made several key sales staff from Little Creatures jump ship.
Also, by launching its own craft line “Crafty Beggars” in New Zealand, Lion has created some serious in-house competition among its various craft beer brands. Besides, Lion has now far too many draught beers in its portfolio so there is bound to be some rationalisation.
Asahi’s Independent Liquor does not enjoy the luxury of pick & chose yet. Actually, its portfolio has been seriously lacking in beer brands, something which may be blamed on Independent Distillers’ original focus on alcopops and pre-mixed spirits brands. Independent Distillers was Australia’s and New Zealand’s major producer of these products. When Asahi purchased Independent Distillers in September 2011, the company lost the license to brew Carlsberg (to Coopers) in Australia but won the licence to produce Carlsberg’s cider Somersby.
Today, Independent Distillers offers Asahi Super Dry beer in the super premium segment, Kingfisher in the mid-priced International sector, Cricketers Arms in the mainstream craft and Somersby in the imported cider category.
In February 2013 it was revealed that Asahi is far from happy with its purchase of Independent Distillers. The Japanese company thinks it grossly overpaid when it bought the company from its then private equity owners Pacific Equity Partners and Unitas for NZD 1.5 billion (USD 1.3 billion). The two had acquired Independent Distillers in 2006 for NZD 1.2 billion, outbidding industry buyers such as Brown-Forman, Lion Nathan, Diageo and Asahi.
Asahi alleges that the forecast earnings figures were “inflated” due to the wrongful inclusion of income and exclusion of expenditure to the tune of NZD 42 million (USD 36 million). It is seeking compensation from Pacific Equity Partners and Unitas to the order of possibly NZD 500 million (USD 425 million).
The fight will be played out in the courts, in Australia and in New Zealand.
