01 October 2021

Lion buys Stone & Wood for AUD 500 million: Is it such a big deal?

Australia | Despite having been in and out of lockdowns for longer than any of us, many Australians have become rather serene about their lot. But come the sale of craft brewer Stone & Wood to the country’s number two brewer, Kirin-owned Lion, in September, there was suddenly talk about it “sending shockwaves through the industry” (the website craftypint.com). Elsewhere, the acquisition, which is subject to regulatory approval, has been described as a bombshell, the end of an era, a devastating blow for the independent sector, etc.

It must be the biggest story in the Australian brewing industry for some time – at least since Asahi bought Carlton & United Breweries from AB-InBev in 2019. After all, there will be plenty of “losers”.

Accusations of turncoatism have been lobbed against Stone & Wood’s founders, who used to be known as staunch defenders of craft brewers’ independence. So, pity Stone & Wood’s other shareholders, who did not want to sell, but will still be peeved that they are now being denounced as hypocrites.

Then there are the employees of the Fermentum Group, the owner of Stone & Wood, who bought into the company’s ethos. “They will have been knocked sideways by this,” says James Smith of the website craftypint.com. “While Lion has guaranteed their jobs post-sale, and 80 percent of them who’d been with the company long enough to become part of the employee ownership scheme will receive a payday from the sale, no doubt many will be questioning whether they want to remain with the business,” Mr Smith argues.

One of the biggest victims of the sale is the Independent Brewers Association (IBA), which Stone & Wood’s founders were instrumental in getting off the ground. The IBA has already suffered financially under the pandemic. It had to lay off staff, with two Brewcon conventions cancelled. “Losing its largest member and, presumably, access to resources and IP previously shared with the association, isn’t beneficial however you look at it,” Mr Smith explained.

“Looking at pure numbers, you couldn’t have taken more litreage out of the indie sector with any other single sale, pushing the IBA’s target of 15 percent market share further into the distance,” Mr Smith added.

Moreover, we should not underestimate the sale’s effect on loftier issues, like the IBA’s mantra of independence. In fact, who needs “independence” pushed down consumers’ throats, if craft brewers’ response to the covid pandemic has been to urge consumers to “buy and drink local”? As localism has trumped independence, the flag of independence has hung limp on its pole for quite a while already.

In the end, though, indie craft brewers will slap each other on the back, saying “no worries, man, she will be alright”. Even with Stone & Wood struck off the list, there are still 600 craft brewers to choose from for beer lovers. So, no big deal.

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