Independent brewers claim sneaky big brother tactics

This article first appeared on Newsroom.co.nz.

A campaign aimed at improving the image of beer has caused a volcanic backlash from within the industry, with accusations of trickery and dirty tactics. Shane Cowlishaw reports.

It is, Invercargill Brewery’s Steve Nally says, simply absurd.

No, he’s not talking about his latest experimental beer to hit the market.

This is the newly released marketing campaign aimed at improving the beverage’s image in the public eye.

Beer the Beautiful Truth, or BTBT for short, was launched last month complete with flashy website and the introduction of selected nutritional labelling on certain products.

Pushing a 99 percent sugar-free message, its stated aim is to provide the public with more information about what they are consuming.

Behind it is the Brewers Association, which in New Zealand represents the big players: Lion and DB.

But much to the association’s surprise, the campaign has infuriated the growing flock of independent brewers who found out about BTBT in an email offering them the chance to take part the day before the launch.

Soon after the announcement, social media was awash with outrage as brewers attacked their keyboards.

BTBT was likened to a “stealth bombing” attack, described as sneaky with claims the true aim was to turn public opinion against craft beers whose labels were void of the information about sugar.

Beer writer Martin Craig summed up the feelings of a good portion of the craft beer community in a piece in which brewers raged at the secrecy of the launch.

There were also claims of a conspiracy theory, with Kereru Brewing’s Chris Mills calling it an “anti-craft brewing marketing campaign”.

Nally, from Invercargill, was blunt in his assessment.

The sugar-free claims drew attention to a perceived health benefit from drinking alcohol.

He was also sceptical about the reasons behind the campaign and the need for it.

“I read Beer the Beautiful Truth and I personally think it’s written by some f***ing six-year-old, there’s nothing smart about it.”

Can’t they all get along?

Testy brewing waters are not unique to New Zealand.

Friction has also surfaced in Australia, with Lion throwing its toys and leaving the Craft Beer Industry Association.

This was a case of jumping before being pushed, however, with the group already considering excluding the big players.

Soon after Lion’s announcement CIBA countered by saying its membership was now limited to independent breweries only.

But BTBT was introduced in Australia back in 2015 and not met with anywhere near the vitriol it has in New Zealand.

Australian beer writer and journalist Matt Kirkegaard was doubtful the goal of the campaign was to target craft brewers.

It was likely an unintended consequence, with the main goal of Lion – who ran the Australian campaign by themselves – to arrest the decline in beer consumption.

But he was critical by how the positive aspects of beer were communicated.

While some health information had been shared, the campaign had avoided discussing the brewing process of their beers such as high gravity brewing, hop extracts and pasteurisation.

“It’s a little like running a campaign saying how wonderful cheese is and putting highly processed cheese singles beside a four-year aged cheddar and saying they are made the same way. No consumer would think they are.

“Essentially, this is a marketing campaign … as such, you wouldn’t expect them to discuss all these issues of course, but that pretty much undermines the claim that it is the beautiful truth.”

In New Zealand, there are two beer industry groups – the Brewers Guild and the Brewers Association.

The former is open to all breweries, and includes the Association.

This is where things get tricky.

Many smaller members want the bigger players out, distrustful of and disagreeing with their approach.

But without Lion and DB as members, there are real questions about whether the Guild could exist in a way to, say, lobby the Government meaningfully on alcohol-related issues.

Currently the Association lobbies the Government on all legislative and regulatory matters on behalf of the Guild for a nominal fee.

The future could see the two split but until then the relationship remains and it was, therefore, a diplomatically-worded statement released by the Guild regarding BTBT.

Executive member, and Three Boys Brewery founder, Ralph Bungard described the campaign as “potentially misleading”.

Despite the good relationship with the Brewers Association, Bungard said they represented just two of more than 150 breweries now operating in New Zealand.

“We work well together on many challenges facing our industry.

“However, on this campaign the opinions of the organisations differ.”

There was no mention of the fact that the Brewers Association may only represent two brewers, but they make more beer than the rest combined.

The Guild’s president, Emma McCashin, told Newsroom discussions were underway about how the Guild could be structured in the future.

Essentially, it was an organisation largely staffed by volunteers and needed more funding to be better effective.

“In its current form, the Guild would be stretched to deal with all the lobbying/regulation function like that of the Association.”

Is there a conspiracy?

While there’s no way to know for sure that this wasn’t an evil plot, it seems far-fetched to assume the main thrust of the campaign was to take down craft brewers.

The big players have invested heavily in the segment, with lion snapping up Emerson’s for $8m and more recently Panhead for a potential $25m, while DB gobbled down Tuatara earlier this year for an undisclosed sum.

Lion has also long-supported the country’s biggest beer festival, Beervana, supplying all the tap systems for the event.

Is there an evil plot to derail the craft beer industry? Photo: C K Golf

But equally, while the public have been demanding more information on their food products there is little doubt BTBT is not simply an altruistic answer to their questions.

It’s also a marketing campaign, aimed at boosting the flagging profile of mainstream beers.

We are drinking far less beer than we used to (although the latest statistics show a levelling out) but a good 85 percent of it is still mainstream brands.

Profile-wise, however, craft beer is king.

Media articles abound, people such as Garage Project’s Jos Ruffell and Epic’s Luke Nicholas are the evangelists of a growing scene, and big beer is, well, boring.

It seems far more realistic to look at BTBT as a) a move to try and boost beer sales by appealing to an increasingly health conscious public and b) an attempt to get out ahead of the inevitable.

Epic’s Nicholas agrees, doubting the big brewers were expending that much energy purely to attack the craft segment.

There was merit in the argument improving the image of beer would help all in the industry, but he has real concerns about the impact any legislative change around labelling could have on small players.

Testing and changing labels would be a real burden on many producers, leaving them struggling to survive.

The Ministry for Primary Industries is working with its Australian counterparts on what kind of labelling, if any, alcohol should have

Targeted consultation by the Australia New Zealand Ministerial Forum on Food Regulation will happen in June and will include the government, public health bodies, industry, and consumer groups.

Colin Holden, food and regulatory policy acting director, confirmed both compulsory and voluntary options would be explored.

The Ministry was also aware of claims the campaign made beer look like a healthy choice and diverts from the fact most of the kilojoules in beer comes from the alcohol content.

“MPI is working closely with the Brewers Association to assess whether these claims meet the requirements of the Australia New Zealand Food Standards Code.”

Big beer responds

It’s understood many of the team which worked on the BTBT campaign was left shocked and hurt by the response it received from the independents.

But this is big business and they have dominated the product for years.

During that time they’ve pushed particular beers as being healthier than others, so in a way they only have themselves to blame for the health perceptions they are trying to fix.

Kevin Sinnott, external relations director of the Brewers Association, says there was no grand plot.

Research had shown 66 percent of people believed beer was high in sugar and with consumption down, this was a move to improve its profile.

It was also a case of getting out in front of changing legislation, which would be happening whether the wider industry liked it or not.

“We know that this has been coming, it’s still coming, it’s been happening slowly but we fully expect that voluntary [measures] will be in place in the next few years and we fully support that.”

Lion’s marketing innovation director Dave Pearce echoed the statement, describing the company’s reaction as “genuinely surprised” at the criticism from industry peers.

The intent of the campaign was to benefit the entire beer category and results from the Australian launch had shown a benefit for all brands, not just Lion’s.

“We believe the more brewers get involved, the better for Kiwi beer lovers, so we hope other breweries large and small jump on board as well.”

One looming question is if BTBT is consumer driven, why not simply include an ingredients list like most products do?

The Association’s campaign says beer generally contains just four ingredients – malt, hops, water, and yeast.

While this is true for most beers, some include adjuncts, including those of the big brands.

This is another topic that has seen the “sneaky” term thrown around in small brewer’s circles.

Sinnott admits there is some validity in this criticism and the introduction of a full ingredients list for each beer on the BTBT website was being explored.

The Brewers Association have also offered to contribute to the costs of testing beers for small breweries, who were happy to contribute $1000 for one of their beers to take part.

But it’s not so simple for craft producers.

DB and Lion have massive, automated brewing systems, ensuring their range of products are identical each time.

Independent breweries often struggle to replicate batches due to equipment or the need to swap out hops when a particular type is in short supply.

They also brew a huge range of different beers, some only made once.

The monkey in the room is the sugar. The fact is that while your Tui or Lion Red may be almost completely void of it, they also don’t taste as flavourful.

Brewers say this is because residual sugars add flavour to beer, removing it leaves a bland product.

Translation: craft brewers getting their beers onto this site would be nigh impossible.

But Sinnott believes this may not be the case, although he couldn’t explain the exact science behind that.

There were different testing methods available and not all were created equal.

Many craft pale ales and pilsners could reach the 99 percent threshold and the Association was happy to work with any brewery, obligation free, that wanted to test its products.

“We know the public wants to know and a lot of the craft brewers would be surprised at how low in sugar a lot of their products will be.”

Just how many breweries take up Sinnott’s offer is moot, but it appears the rift in the market is far from over.