A decision by the competition watchdog to maintain the status quo following a long-running tap contract investigation has been described as a “body blow” by The Independent Brewers Association (IBA).
The Australian Competition and Consumer Commission's (ACCC) investigation began back in 2014 after craft brewers complained that the major brewers were locking them out of beer taps through the use of exclusivity provisions and volume requirements.
Some of Lion and Carlton United Breweries (CUB) contracts required venues to dedicate over 80 per cent of beer taps to their big name brands, they alleged, in exchange for rebates, infrastructure investment and refurbishment loans.
The ACCC, which has now examined contracts and practices at 36 venues across NSW and Victoria, this week announced that this was unlikely to substantially lessen competition.
“While some craft brewers may have been refused access to taps by certain venues, our investigation found that the venues were responding to consumer demand for certain beer brands, rather than restrictions imposed by the big brewers,” ACCC deputy chair Dr Michael Schaper said.
“In fact, over half of the venues contacted by the ACCC indicated that customer preference was the key factor in determining the brands, types of beer and number of craft beers offered by the venue.”
The IBA described the ACCC's decision to take no further action as a “body blow” for Australia's independent brewers.
“This investigation has been dragging on for more than three years and to now find out that the status quo will be maintained is a bit hard to take,” said IBA chair Ben Kooyman.
“For any small business to survive it needs protection from the market practices of dominant players. We had hoped that Australian consumer law, as interpreted by the ACCC, would be able to provide that protection. It seems we were wrong.”
Kooyman said the ACCCs findings did not match the realities faced by its members in the marketplace.
The IBA, which represents Australia’s 420 small independent breweries, and Kooyman said its recently released National Economic Evaluation showed that market access was considered the second greatest constraint to growth for independent brewers behind excise.
“We find it puzzling that the investigation seems to have focused on the venue’s experience rather than that of small brewers,” Kooyman said.
The IBA was formerly known as the Craft Beer Industry Association, but the name was changed in May this year after the Association’s membership rules were altered to exclude large multi-national brewers.
The IBA said it will continue to pursue the tap contracts issue as part of its on-going advocacy campaign to give independent brewers a fair go.
The ACCC also said it would continue to closely monitor conduct and developments in the market.
“There has been a significant growth in craft beer sales during the ACCC’s investigation and we will continue to monitor for anti-competitive behaviour,” Dr Schaper said.