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Australian Competition and Consumer Commission chairman Rod Sims is still concerned about the level of access the growing army of craft and boutique brewers are getting to the broader beer market in pubs and bars, despite having waved through the Australia component of a $145 billion global beer mega-merger last month.
Australia has a highly concentrated beer market dominated by foreign-owned Lion and Carlton & United Breweries, even though there has been fast growth in the number of small craft brewers setting up, with their numbers having expanded to about 350. Craft brewers now hold about 5 per cent of Australia's total $14 billion beer market.
But Mr Sims said he still has serious concerns that craft and boutique brewers are being restricted through the dominance of the two big players and the stranglehold they have on beer taps in hotels and bars in the draught beer market, where beer is sold through taps on the bar connected to kegs.
The ACCC has been closely scrutinising the issue of exclusivity and semi-exclusive tap arrangements for months, and is in talks with the big brewers on the matter.
"We do have concerns that they're not getting sufficient access to the market, and we're engaged with the larger brewers on this issue," Mr Sims told The Australian Financial Review.
Mainstream beer sales are in slow decline but the craft and boutique beer market is growing at between 15 to 20 per cent a year as drinkers veer toward the proliferation of cutting-edge brands and different tastes.
But the traditional big beer brands such as Victoria Bitter and Carlton Draught made by CUB, and XXXX and Tooheys made by Lion, still make up a large chunk of the market. CUB sells about 30 per cent of its beer through pubs and bars in draught form, and the remaining 70 per cent is sold in bottles and cans through retailers such as Woolworths and Coles, and bottle shops attached to pubs.
Chris McNamara, the executive officer of the Craft Beer Industry Association, said the craft brewers simply wanted the same opportunity to access that route to market as the big brewers, and having them locked up through exclusive or semi-exclusive arrangements wasn't fair. It was a big barrier to entry.
"Access to market is a huge issue. They simply want the same level of access to the consumer as the big guys," Mr McNamara said.
He said the craft brewers were looking forward to the ACCC outlining the results of its investigation so there were clear rules around the issue of access to taps.
The CBIA defines a craft brewer as any beer maker producing less than 40 million litres of beer annually.
The clever branding and David versus Goliath battle as the small brewers with names including Prancing Pony, Killer Sprocket and Badlands Brewery take on industry giants is enticing to many inner-city drinkers.
The rise of craft beer has also been happening in the United States and is helping to drive a wave of buyouts and mergers across the industry, including the $145 billion global mega-merger where Anheuser-Busch InBev is taking over SABMiller, which itself bought out Foster's and its CUB operations in Australia in 2011 for $12.3 billion.
The ACCC gave the green light to the Australian leg of the global mega-merger last month, with Mr Sims saying it would not result in higher beer prices for consumers.
An agreement where Lion will give up the Australian distribution rights to the No.1 imported beer, Corona, and hand it over to CUB after Anheuser-Busch buys out SABMiller also appeased the competition regulators' concerns on that front.
Corona makes up about 6 per cent of the Australian beer market and the shift in distribution will mean CUB will again become No.1 in the Australian market with about 45 per cent market share, as Lion, owned by Japan's Kirin, drops down to about 40 per cent market through the loss of Corona.