To paraphrase my good mate Myles, and his blog name, Drinking got me thinking. I’ve been pondering the state of affairs in the Irish Beer Market.
It seems like the butterfly effect, the ripples from the recent announcement by Beavertown that they have partnered with Heineken, has caused a wide range of reactions from boycott, to it’ll be ok if the beer doesn’t change etc. But will it force people to search for transparency?
They have sold a “minority stake” in their business in exchange for £40,000,000. To be clear, a minority is anything less than 50%, it stands to reason the share holding will be between 20 – 49% in my opinion. We’ve seen instant reaction from brewers who were due to attend the Extravaganza in September, with a number of high profile international and UK brewers pulling out. Much has been written about this, and i’m not going to dwell on it. I’m looking at the Irish Context here.
Firstly, the question most face is the beer any good, but do consumers value independence over taste? Or taste over independence? Is it “just beer”? A phrase I hear often, but to those small independent brewers, it’s not just beer, it’s their livelihoods, the wages of the staff they have, and the payment of suppliers. It’s all a big circle. Ultimately money spent on local companies goes back into the local economy much more than the multinationals.
Has the term Craft been totally hijacked by marketeers at this stage? When you hear of crafted industrial scale beer, you know that we are through the looking glass.
For the elimination of doubt the following breweries that operate here are not independent, using the Brewers Association Definition.
- Carlow Brewing Company – 32% sold to Estrella Galicia, an industrial brewery from Spain which produces 279 Million Litres (2016) Source
- 5 Lamps Brewing Company – Majority owned by C&C – which produces Bulmers, and Tennants, they are also responsible for Dowds Lane brand.
- 8 Degrees Brewing – recently purchased by Pernod Ricard / Irish Distillers
- Franciscan Well – owned by Molson Coors
8 Degrees & Carlow Brewing and Franciscan Well have done a heck of a lot for the Irish Beer Scene, it would be mad to throw the baby out with the water, however, the facts are, that the above breweries don’t meet that independence criteria, and if your modus operandi for purchasing craft is to purchase independent, those no longer fit the bill.
Let’s make no mistake, Heineken, have been making waves in Ireland, where they enjoy a number 2 position in the market behind Diageo, and usually you see the big lads including Molson Coors, and C&C sniping each other out. We’ve seen exclusivity contracts signed in pub groups which would block out other taps entirely. As a consumer, we’re getting shafted. Yet the competition authority doesn’t deem it worthy of investigation!! But one theme is common, they all view the rise of the independents as a threat this is why you see the amalgamation of craft brewers into their portfolio, Heineken has purchased stakes in 2 London breweries, Brixton, and Beavertown, as well as Lagunitas (in full). It’s also why you see reps from these places throwing free kegs, POS, merch, other stuff to block out true independent beer producers.
Some of the quassi “craft” brands we see are
- Cute Hoor, Orchard Thieves, Applemans – all Heineken Products. You could also include their world beers, Paulaner, Moretti, Tiger etc.
- Open Gate Brewery – clearly stated they are Guinness products made in St James Gate, which is more than can be said for Cute Hoor
- Rockshore – a coors light drinker targeted beer by Diageo
With the acquisitions not seeming like they’ll slow down, I think we’ll become a bit numb to it, and shrug our shoulders and go, there goes another one. But it raises issues for consumers of beer, as our importers bring in more beers to widen the palette available, it must raise issues for some.
Four Corners have long held the Beavertown account for Ireland, and they also import Ballast Point (owned by Constellation Brands eg Corona / Modelo), Grand Cru bring in Lagunitas, and Founders (1/3rd owned by Mahou of Spain). These once fiercely independent brewers, are now backed by multimillion euro turnover and profit businesses which gives them huge financial fire power.
Ultimately – it’s your choice to buy a Macro product, and in Ireland with market share hovering about 4% it’s likely you’ll be at some event or something somewhere in a pub where they’ll not stock any independently made beers. What do you do?
It is the MO of large corporations to blur the lines and confuse consumers into thinking they’ve made a choice. Look at the way cheese is packaged in the supermarket? Nice farm imagery, yet the reality couldn’t be further from the truth. If any of you have seen the TV series Continuum, you’ll know the future is run by large corporations, let’s hope that isn’t a future that comes to pass.
So, ask the question, if the person you’re asking doesn’t know, it’s likely non independent, and make your choice accordingly. If the name of the brewery isn’t on the tap, it’s likely not independent. So what do you do? That is up to you.
4 thoughts on “Blurred Lines – The illusion of choice.”
Great post Wayne, really enjoyed reading your thoughts on independent/faux independent/macro & buyouts.
Unfortunately it is part and parcel of business and for example with Beavertown I’m sure its not one they made lightly.
For me I was never a Beavertown fan as such, they were never a brewery I sought out on a regular basis. Sure, some care about the buyout, some don’t care, some casual beer drinkers won’t even know about it and again, will they even care? Theres no doubt about it the small guy is a concern for the big guy, we see this with exclusivity agreements and buyouts as you have mentioned.
I noticed a link to a 2014 post on your blog about prices in pubs, in 2018 it seems that the silly pricing now extends to off licences, typically and historically the much better value option for buying beer is no longer much of a thing, its the 2018 example of craft drinkers being taken advantage of.
I think theres a threat to independent brewers in terms of what their products are costing at retail level. Ive noticed (Im SURE I’m not the only one) a new trend of a good number of Irish beers now being in the €4-€5 bracket since the new 440ml can has come into fashion and for me this is just unsustainable.
Its really not going to be long before €5 is the standard and €6/€7 is next price bracket for a single can of beer to jump into.
If we are going to take the casual drinker (who doesn’t care about who brews their beer, who owns it or where its brewed) for example, how is the sector going to expand and grow if the off licence/retail price is so outrageous that they choose to go for a macro multipack of whatever over a locally made product thats supporting the local economy and local jobs, every time?
What hope has the industry got of improving on its 4/5% market share?Essentially nil, no hope of growth.
Craft/independent beer needs these people buying their product to grow and the prices are without a doubt one of the biggest barriers to this happening, lets not forget craft/independent (largely) don’t advertise so often the first and only time a casual beer buyer browsing their off licence sees a breweries beer is alongside the price on the shelf, this isn’t good.
How can anyone be tempted to part with hard earned cash when theres a glaringly obvious gulf in price, at the end of the day to a lot of people, beer is just beer, they don’t feel the need to be spending the guts of €20 on 4/5 cans.
High prices only serve to reinforce the long held belief that craft beer is snobby and has an elitism about it, beer has been for everyone since the beginning of time and should remain for everyone.
Im not talking about a price race to the bottom (because craft won’t win that and who wants beer half cut with rice/corn anyhow!?) but seriously single cans of local/national beer that cost €4/€5 are a joke. Theres never been as many breweries in Ireland, prices should be a lot more competitive than they are.
UK imports are even more ridiculously priced, its really not unusual to see beers from some of the UKs most popular craft breweries now passing the €6 mark, only last week I saw a session IPA priced at €6.29, the Cannonball series are another example of outrageous retail prices with 2 of the 3 cannonballs in the €7 bracket.
Northern Monk and Cloudwater are another example of incredibly good and consistent beers but again their beers at retail level are off the price scale.
With Brexit looming, are we going to see less UK imports or are they going to cost even more?
Since Christmas I have really scaled back on my UK purchases mostly due to price, my purchasing of US imports has practically ceased due to quality, the dates are miles out and are NOT stored correctly for weeks and months on end wether this is by the wholesaler or retailer or most likely, both. If you are going to sell a product, store it correctly. There doesn’t seem to be many, if any working in retail or wholesale who know anything about how quickly beer degrades if its stored at room temperature and in the case of bottles, on shelves under UV lighting. This is basic stuff, how does the industry involved in selling it not know this!?!
Unfortunately I too now pass up Irish beer on the shelf at €5 or more, this isn’t supporting the local scene (Ireland is small, I consider all Irish beer to be local) and I don’t want to give up supporting Irish beer but price matters and for me a €5+ can isn’t anything even close to resembling value.
While my issue is with the ever increasing price of single cans of beer, there ARE deals out there, 4 for €10 330ml cans but the selection is often limited and rarely changes. There are deals on core ranges from some breweries and there are 3 for €10 deals on the newer (now apparent industry standard) 440ml cans too so why is there be such a discrepancy in prices?
Ive worked in a brewery and I know overheads are pretty big and margins are tight, the cost of bulk malt, signing hop contracts sometimes years in advance, insurance, maintenance, equipment, staff wages, company delivery vehicles where possible etc.
I know brewers are doing their very best to put out quality beers as much as they can and I know that while retail stores (along with pubs) are the only current method of selling their product, retail price is going to stunt any further growth.
Consumers need value to return, breweries need the consumers to grow.
Providing the pricing is sensible and favourable, the sooner we can go to the brewery and purchase at source the better if it means cutting out the many MANY middlemen getting a cut. Until the retail side cops on calms down my purchases are going to be less.
Retailers are creaming it, breweries aren’t.
Great reply Barry, thanks for taking the time to go into such detail. I’ll come back later and post some further thoughts
Great read Wayne.
Cheers Reuben! 🍻