ALCOHOL POLICY

Floor price – no more cheap wine? The Federal Government has asked the Australian National Preventative Health Agency to develop a model for floor-pricing alcohol and to report by December this year. Some submissions already made maintain that all consumers should pay ay least $1.30 per standard drink – this would make the cheapest wine about $9.75 per 750mL bottle or $52.00 for a four-litre cask for wines of 11% abv – products above 11% would be more expensive).

Another body, the Consumers Health Forum, wants alcohol prices raised significantly but through taxation only, thus ensuring that revenue raised would flow directly to the Government and not to manufacturers. The AHA (SA Branch) says that ‘such proposals could potentially and unfairly wipe-out SA’s bulk wine producing regions such as the Riverland’. In Alice Springs, the People’s Alcohol Coalition has already successfully lobbied the big supermarkets to introduce a floor price in the town and wants the minimum price set at more than $1.30 per standard drink.

Research conducted by the University of Adelaide indicates that, as pensioners are the main consumers of cask wines, they and others over 55 would be treated unfairly if the suggested minimum price was introduced. [From Adelaide Advertiser, Aug 22& 23, 2012]

Published data for average retail prices vary considerably. Thus, full-strength beer is quoted at $1.45 to $1.75 per standard drink and spirits at $1.65 to $2.50 while wine currently sells from 30¢ to 95¢ per standard drink. The Foundation for Alcohol Research and Education (FARE) notes that ‘eight separate inquiries, including the Henry tax Review, have called for the end of the discount tax treatment of wine; the change is also supported by the spirits and beer industry.’ FARE maintains that ending the discount taxation of wine should be a higher priority than placing a minimum price on alcohol. Countering the arguments, the Winemakers Federation says that ‘Australia already has one of the highest wine taxes … and the wine industry employs four times as many people as the beer industry and is a mostly domestic industry that should be recognized by the tax regime.’ [From Adelaide Advertiser, Aug 29, 2012]

[I recall that the Australian Government was considering the adoption of a uniform scale of excise by alcohol content for all alcoholic beverages in the early 1950s (and perhaps had reviewed the system even earlier) – a long time ago, whenever it started! In my mind, there is little doubt that the current seemingly irrational system, whereby excise is applied to some types of alcoholic beverages and not to others, is confusing and must surely be due for comprehensive review, irrespective of mounting pressures from health and other lobby groups. JH ]

Restrictions in NSW? A ten-point plan to ‘Reduce Alcohol Harm’ has been released in NSW by FARE, which, it claims, offers the state Government a ‘complete solution’ to reducing alcohol-related harm. CEO Michael Thorn believes the Government is ‘at the crossroads’ and that the new licensing and alcohol-serving restrictions for Kings Cross, as already proposed, do not go far enough. According to FARE, alcohol-related violence affects 34% of people in NSW and it wants the government to implement its ten-point plan across the state. FARE demands more public consultation and control on new liquor applications, as well as the introduction of late night transport and crowd management plans in high density areas, and for public transport operating times to be factored in when new licences are issued. It also wants a ban on the sale after 10pm of shots, RTDs with more than 5% abv and any mixed drinks with more than 30mL of alcohol. The plan also limits the number of drinks a patron can purchase to four at a time. [From The Shout, Aug 27, 2012]

Meanwhile, according to a leading economist, the Australian Government has been relying on wildly inaccurate research to justify its alcohol policy. Dr Eric Crampton, from the University of Canterbury in New Zealand, last year released ground-breaking research demonstrating that the social cost of alcohol to the Australian community has been vastly overstated. Discussing these findings in recent addresses in Canberra and Brisbane, he said that health campaigners have for many years used erroneous research to push for tougher regulatory measures to curb problem drinking. However, using mainstream economic modelling, he found alcohol costs Australia $3.8 billion a year – less than the comparable tax take on alcohol – compared with previous findings by academics of $15 billion. He criticized faulty methodologies ‘that are purported to be economic arguments… used to make claims that are just nonsense, and build support for regulations that limit people’s freedom.’ [From The Shout, Aug 29, 2012]

Secondary wholesaling Case limits have been introduced by Coles in an attempt to stop secondary wholesaling whereby it sells liquor to its independent competitors, according to Terry Bowen, finance director of parent company Wesfarmers. He admits that this move impacted on overall liquor sales in the last quarter but the action was taken for ‘the greater good.’ Coles’ liquor operations are now considered to be back on track, following the appointment of a new management team. [From National Liquor News, Aug 2012]

BEER & BREWING: Australia – general

Imported beers A recent review of imported beers highlights the ongoing argument about the quality aspects of fully-imported beers versus those brewed locally under licence. A good example is a provocative statement (by an importer): ‘although the brewed under licence products are a good representation it will never exactly replicate that of the original in terms of flavour profile or quality.’ This is an interesting and potentially misleading statement, in view of the fact that for the past 50 years or so various Australian brewers have consistently met the rigid requirements of the ‘parent’ global brewers in producing a wide range of beers for them under licence.

It is, of course, well known that locally-brewed products will usually be fresher than many imports and hence may present different flavour profiles. For years, importers have faced the possibility of presenting products with deteriorated flavour characteristics occasioned by long transport and associated heat stress and thus it is good to note that more beers, particularly craft styles, are now imported in refrigerated containers to keep them ‘brewery fresh’ for longer periods. The review concludes that ‘It’s always best to leave it up to the consumers to decide what version they think is better, but the import market has never seen a better range than right now.’ A guide to ‘all the best imports available to retailers’ of about 50 beers from 13 countries is included. [From National Liquor News, Aug 2012]

On this theme, I note with interest that Australian consumer magazine, Choice, recently published a review comparing major premium imported beers with the locally brewed versions. Blind taste tests were conducted by a seven-person panel with seven beers brewed under licence in Australia, alongside samples of their counterparts from the original (parent) breweries, brought into the country through parallel channels and available on the retail market in Sydney. Beers involved were Grolsch, Kronenbourg 1664, Carlsberg, Heineken, Stella Artois, Becks & Peroni Nastro Azzurro. Choice reported that there was no unanimously preferred brew, with local brands on a par with their authentic counterparts. [I deplore the use of ‘authentic’ in this context …surely all the beers are authentic in the eyes of both the licensing and the licensed brewers?] [From Australian Brews News, Aug 30 & Adelaide Advertiser, Sep 1, 2012]

What next? Research in the UK has found that drinkers consume lager from a straight-sided glass more slowly than from a curved one but the type of glass did not have the same effect on lemonade drinkers… one wonders what would happen with ale, stout or any of the other many available beer styles. The researchers said ‘pub-goers might find it more difficult to judge how much they have drunk if the glass is wider at the top than at the bottom, leading to them downing their lager more quickly’. I don’t think that the results would be replicated in many Aussie front bars at peak trading times, even in these times of reduced consumption but who knows…? [From Adelaide Sunday Mail, Sep 2, 2012] [A detailed précis of this research is given in Australian Brews News, Sep 4, 2012]

BEER & BREWING: Australia – mainstream breweries

Casella & Coca-Cola Amatil On August 22 Casella Wines announced it had signed an agreement with Coca-Cola Amatil (CCA) to form a brewing joint venture partnership in the future. Under the agreement, confirmed by CCA, a new entity will take over Casella’s current brewing operations after December 16, 2013, when the joint venture company, the Australian Beer Company (ABC), will be responsible for the brewing and marketing of Casella’s beers. The joint venture does not include Casella’s winery business which will remain 100% family-owned and operated by Casella.

MD John Casella said the agreement with CCA marks an exciting new chapter for Casella Wines and the company’s expansion into the beer category.

CCA will lend up to $46 million into its future joint venture with Casella, the company revealed to the ASX on August 22, advising that the loan is a preparatory step towards its re-entry into the Australian premium beer market which will be used by ABC to assist with the acquisition and expansion of the new brewery at Griffith, NSW into a 500,000 hL annual capacity operation. The loan will convert to an equity interest in ABC after December 16, 2013. As CCA is currently subject to a restraint not to sell, distribute or manufacture beer in Australia until that date, ABC will also refrain from carrying on those activities. After that, ABC will be responsible for manufacturing premium beer and developing brands, whilst CCA will be solely responsible for the sales, distribution and development and management of customer relationships.

CCA Group MD Terry Davis, said: ‘This new agreement with Casella will give CCA the opportunity to access a world class, low cost brewery which will enable us to re-enter the premium beer market in Australia … with sufficient initial manufacturing capacity to cater for approximately 15% of the premium beer market in Australia.’ {From The Shout, Aug 22 & Australian Brews News, Aug 22, 2012 & other sources]

Coopers Chairman Glenn Cooper has revealed that the company is setting up a ‘craft beer division’ to expand the Thomas Cooper’s Selection range, following the launch and success of Celebration Ale earlier this year. He said ‘the new division can bring in some special seasonal beers, like a winter warmer, and they would be under the Thomas Cooper’s Selection banner’ and indicated that the new label will enable Coopers to experiment with craft beers without running the risk of confusing people with its mainstay range of Pale Ale, Sparkling Ale and Stout. ‘It gives us a chance to differentiate between the real Coopers big sellers and a craft department.’ He said. [From The Shout, Sep 3, 2012]

A special can pack will be released around Australia for the lead-up to this year’s Bathurst 1000 car race, to be held from October 4–7. The Bathurst pack contains 20 specially labelled cans of Coopers Mild Ale (3.5% abv). Chairman Glenn Cooper said ‘as Bathurst was the most famous motor racing carnival in Australia it was appropriate that, as an exclusive beer partner and major sponsor of V8 Supercar racing, Coopers offered something special to celebrate the 50th year of the race. It is the first time we have produced such a pack and we expect they will be keenly sought by motor racing fans as well as beer can collectors around Australia.’ Coopers became the exclusive beer partner and major sponsor of V8 Supercars early this year. [From Australian Brews News, Aug 28, 2012]

The Distinguished Family Business of the Year Award was presented to Coopers at a function of Family Business Australia in the Hunter Valley NSW on August 24. [From Adelaide Advertiser, Aug 25, 2012]

CUB/Foster’s Australian consumers are prepared to pay more for beer than they currently do, according to Foster’s CEO Ari Mervis. At the Australian Liquor Stores Association (ALSA) conference this week, he said price deflation is one of the big challenges currently confronting the entire liquor industry. ‘If we had a little bit of inflation come into the category it would be quite healthy for your margins, certainly for our margins,’ Mervis told retailers and reiterated SABMiller’s belief that Australians’ current expenditure on beer falls short of its potential, based on global comparisons. [From The Shout, Aug 29, 2012]

By the way, CUB once again stands for Carlton & United Breweries, rather than Carlton & United Brewers as the company was known for few months.

Australia’s leading premium beer Crown Lager will be available on tap in early September and in October Victoria Bitter (VB) will be restored to 4.9% abv (after reductions to 4.8% in 2007 and 4.6% in 2009). With respect to VB, the company said that its customers’ demands could no longer be ignored … ‘we can’t call ourselves the big cold beer unless we are the big cold beer.’ [From Australian Brews News, Aug 28 & Adelaide Advertiser, Sep 4, 2012] {For more comments re VB, see Australian Brews News, Sep 4, 2012]

Lion In early September Lion Beer, Spirits & Wine Australia confirmed that its partnership with Grupo Modelo will be expanded to include the distribution of Mexican beers Pacifico and Negra Modelo in Australia. Lion MD James Brindley said the highly differentiated Mexican beers will complement the portfolio and continue to add great product diversity in on and off premise niche markets and Mexican specialty venues. [From The Shout, Sep 5, 2012]

BEER & BREWING: Australia – craft & smaller breweries

General At the Craft Brewers Conference in San Diego California recently, Charlie Papazian, president of the Brewers Association, described the current status of the craft beer movement thus: ‘We are not in the bottle, we are in the foam. And it’s still rising.’ He stressed that craft brewing is now well beyond the confines of a mere ‘trend’ as it continues to generate excitement around the world. [From Brauwelt International, Aug 2012].

NSW: The inaugural Trainworks Winter Beer Festival at Thirlmere on August 25 featured many craft breweries, including Balmain, Feral, Holgate, HopDog BeerWorks, Illawarra, James Squire, Little Creatures, Matilda Bay, McLaren Vale, Mountain Goat, Murray’s, Redoak, Riverside, Stone & Wood, 4 Pines, Little Brewing, The Rocks and Two Birds. [From MB News 154, Aug 24, 2012]

SA: In September, the Wheatsheaf Hotel (the Wheatie) will feature The Fountain of Hoppiness, dispensing a range of craft brewed IPAs and other ‘hoppy’ beers – both local and imports – from 7 of its 13 taps. From a published list at least 50 beers will be offered during the month. [From Australian Brews News, Sep 1, 2012]

WA: Brendan Varis (Feral Brewing Co) is off to England to brew a special guest beer for the JD Wetherspoon’s International Beer Festival in October. Wetherspoon’s, founded with a single hotel in 1979, is now a chain of some 835 outlets and its annual festival allows brewers from around the world to brew specialty beers at various breweries in the UK. [From Australian Brews News, Aug 25, 2012]

At Fremantle, The Monk is once again celebrating Oktoberfest with an event running from September 22 until October 7, 2012. A special German inspired menu will be available and a traditional German style lager has been brewed especially for Oktoberfest. Lebkuchenherz (gingerbread love hearts) and pretzels, staple treats at the German Oktoberfest, will also be sold. On weekends there will be German food stalls and entertainment. [From Australian Bows News, Aug 31, 2012]

BEER & BREWING: International

New Zealand Days after announcing its re-entry into the Australian premium beer market, Coca-Cola Amatil (CCA) has firmed its beer plans for New Zealand. As noted above – see Casella & Coca-Cola Amatil – CCA will be associated with the Australian Beer Company, a joint venture with the Casella group. Although CCA is under a restraint of trade in Australia until December next year, the restraint does not cover New Zealand. Coke has distribution agreements with Grupo Modelo, Carlsberg and Molson Coors for Papua New Guinea, Fiji and the Pacific Islands, with some Molson Coors brands – Coors Light, Carling, Jaffrey’s and Cobra – to be distributed to New Zealand, hopefully this side of Christmas’. [From E-Malt.com.Flash 35a, Aug 29, 2012]

USA President Barack Obama is a beer lover and a recent report indicates he was responsible for the first beer to be brewed on White House grounds. The recipe for a home-brewed Honey Brown Ale, with ingredients including light malt extract, honey, gypsum and corn syrup, was released on September 1. [From Adelaide Advertiser, Sep 3, 2012]

BEVERAGES: General

Demand for bottles declining Packaging giant Amcor has admitted that the high dollar and the impact of increasing bulk wine sales will delay further expansion of its Gawler SA bottle-making plant. The plant, which supplies 47% of the national wine bottle market plus Coopers beer bottle needs, currently has three furnaces operating and employs 300 people. [Recent and projected closures of bottle-making furnaces by competitor O-I (Owens Illinois) in Adelaide, Melbourne and Sydney were noted in earlier Digests.] [From Adelaide Advertiser, Aug 22, 2012]

Distribution deal The decision of the Liquor Marketing (LMG) to exit liquor wholesaling and enter into a $655 million supply deal with Australian Liquor Marketers (ALM) will deliver greater efficiencies for the whole of the liquor market, according to ALM boss Fergus Collins. ALM’s parent company, Metcash, announced it had signed a new 15-year supply agreement with LMG, covering distribution to approximately 1,700 stores trading under banners such as Bottlemart, Down Under Cellars, Harry Brown, Sip N Save, Western Cellars, Liquor Legends & Urban Cellars. ALM CEO Fergus Collins said the deal would increases the volume through its operation to in excess of $3.2 billion. ’It’s positive news for LMG and all the customers from ALM, it’s about efficiencies for everybody,’ he said. [From The Shout, Aug 31, 2012]

CIDER, JUICES, RTDs & SOFT DRINKS

More new ciders Carlton United Brewers (CUB) will launch new variants of both the Strongbow and Bulmers cider brands in the coming months. In September CUB will roll-out its new Strongbow Summer Fruits range, available in three flavours –Apple Cider with Strawberry and Kiwi, Apple Cider with Mango and Passionfruit and Pear Cider with Raspberry and Strawberry. [From The Shout, Aug 31, 2012]

James Squire’s new product – Orchard Crush Apple Cider – is available on tap and in 500mL bottles; it is described as ‘a refreshing traditional cloudy cider with fragrant fresh apple aroma, a broad clean palate and a crisp finish’. [From advert Adelaide Advertiser, Aug 23, 2012 & other sources]

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FROM PAST DIGESTS … 5 YEARS AGO

Drowning in history Boag’s this month distributed limited quantities of Wizard Smith’s Ale, named after Wizard Smith – a drayman – who rescued brewery horses from drowning in a Launceston flood in 1929. The English-style ale is bittered with imported East Kent Golding hops [From Adelaide Advertiser, August 29, 2007]

The RTD age There was a time when well-established brands did not offer pre-mixed products in fear of compromising their integrity. Now, there is no self-respecting spirit brand without an extension into RTDs…one white rum brand admits to researching up to 20 SKUs! Call them what you like: pre-mixes, alcopops, designer drinks, alcoholic sodas, image drinks etc there is no shortage of names for RTDs and they have never been more popular or ubiquitous. [From National Liquor News September 2007]