Local craft beers 'bullied' out of pubs by foreign brewing giants

Foreign brewing giant SABMiller, owner of Carlton & United Breweries, is using tactics to lock out local craft beers from pubs, consumer group Choice has alleged.

The brewing giant is offering inducements like rebates, umbrellas, beer mats and other incentives to lock up between 80 and 100 per cent of beer taps in pubs.

An SABMiller contract, seen by Fairfax Media, demands that its company be the exclusive supplier of all light-strength draught beer; all low-carbohydrate draught beers; all domestic premium and sub-premium draught beers; all imported draught beers; all specialty and craft draught beers; and all draught spirits and ciders.

The contract specifies that Foster's, now CUB, will supply beer mats, coasters, signage and promotional products. A second CUB contract specifies locking up taps for exclusive rights for three years or more.

Choice head of media Tom Godfrey said most beer taps were controlled by one of two international brewing giants, SABMiller or Kirin, at the expense of "genuine Australian craft brewers" and that the larger companies commonly acted like "bullies".

"We know 83 per cent of revenue in Australia flows to the big beer barons, Kirin and SABMiller, " Mr Godfrey said.

"If exclusive dealing cuts competitors, forecloses markets and keeps competitors out, it may well be unlawful," he said.

Choice has sent copies of the contract to the Australian Competition and Consumer Commission.

The ACCC has been investigating the wholesale supply of beer to Australia's pub industry for more than a year. It has written to several small brewers to see whether the large brewers are using tactics that are prohibited under the Competition and Consumer Act.

An ACCC spokesman said it would investigate the contracts sent to it by Choice. He would not comment on whether the behaviour was anti-competitive.

Brunswick's Thunder Road Brewing Company communications director Terry Alberstein welcomed the release of the contracts.

"If there was ever a case for ACCC intervention into a market this is it," Mr Alberstein said.

"The multinational brewers, contrary to their public statements, are targeting independent craft brewers for extinction. Their behaviour, we believe, is completely predatory and anti-competitive."

"Without any intervention from the ACCC the multinational brewers will kill off craft brewing in this country."

Mr Alberstein said Thunder Road and other independent craft brewers were targeted once they had got a foothold in a pub.

"We are aware of countless attempts by the multinational brewers to target our beers and other craft brewers for removal in pubs once we have successfully been on tap. It's like a red flag to a bull; if we are successful getting on tap in a pub or pub group - we're a target."

Choice alleged the major brewers were also using other devices to reduce competition.

"This isn't the only tactic the big brewers are using to muscle in on the growing craft beer market. For some time Kirin and SABMiller have been buying up craft beer brands and now currently control 47 per cent of the craft beer market,"Mr Godfrey says.

"These big global beer barons know there's a price premium on claiming to be craft brews and it's now clear their 'craft washing' strategy extends to exclusive dealing, which sees genuine Australian craft beers locked out of the market."

He said many beer drinkers would be surprised to know that their favourite "craft" brews, including Little Creatures (Kirin), James Squire (Kirin), Fat Yak (SABMiller) and Matilda Bay (SABMiller), were now foreign-owned.

"Even Coles and Woolworths are hopping on the 'craft' bandwagon with Steamrail Ale (Coles) and Sail and Anchor (Woolworths) getting in on the action," Mr Godfrey said.

CUB spokesman Jeremy Smith said while he could not comment on the ACCC inquiry, it was "not unusual for publicans to enter into contracts for the provision of beer, spirits and wine, and it is a long-standing practice".

"In regards to beer, many of these contracts provide discounts on the keg price, as well as investment in the pub such as cool rooms, tap lines and fridges etc.

"Overall, around 70 per cent of our on-premise customers [pubs and clubs] do not have contracts, so overwhelmingly it's an open market."