Rumour has it…

In journalism, they say if there’s a rumour, it’s probably true. And during the past few months in particular, the craft beer rumour mill has been in overdrive.

Popular opinion, in Wellington at least, was that Lion Breweries was close to buying out one of New Zealand’s largest craft breweries, and that an announcement would soon be made by Tuatara that it was joining the Kirin family.

The rumours were half right.

Emerson’s Brewery announced last Tuesday that Lion Breweries had bought 100% of its shares, but that the brewery would operate as a stand-alone operation within Lion, and Richard Emerson and his crew would retain control over the beers and brewing.

Emerson’s Brewery founder, Richard Emerson. Photo courtesy of Emerson’s Brewery.

Good on Richard and the Emerson family. The sad reality for craft breweries in New Zealand is that with the stronghold Lion and DB have in large parts of the country, they can only grow so big¹ – for the time being anyway. And there is no higher compliment that can be paid to a brewer than one of the big two wanting to buy you out. Emerson’s has got the best out of this deal that it could too – Richard retains full control over all the Emerson’s beer, but gets access to Lion’s vast resources and wide distribution. A sound business decision and a well-deserved financial reward for those involved with the Dunedin-based brewery².

And with the sale, there are both pros and cons. There’s a lot of disappointment and sadness among craft beer drinkers that Emerson’s is no longer an independent brewery. But there is also optimism as to what this could mean for craft beer in New Zealand.

Craft beer has been slowly gnawing away at the market share that Lion and DB hold in New Zealand. But while in some parts of the country craft beer is relatively easy to find (Wellington, Christchurch, Auckland), in other towns and cities the closest thing you can get to craft beer is Mac’s or Monteith’s – if you’re lucky. And while Lion and DB both have some good clean beers, they are nothing compared to the variety and flavour of New Zealand craft beer.

The sale means Lion-tied bars will have the opportunity to stock Emerson’s products, exposing more people to the quality and flavour of craft beer. I know several people who had their beer epiphany³ drinking an Emerson’s beer, and I’m confident many more people will have theirs while drinking Emerson’s products as well. That can only be a good thing.

Might we see a change to the brewery branding? Image courtesy of Emerson’s Brewery.

But while Emerson’s will start appearing in Lion bars, it will, unfortunately, start disappearing in others. Some bars, cafes, and restaurants have already announced that they will stop stocking Emerson’s products come November 30⁴, because it’s their policy to stock beer from independent craft breweries. But over the past few years – particularly the past 18 months or so – demand for craft beer has increased in most parts of the country, and DB has become more lenient when it comes to allowing bars tied to the brewery to stock craft beer.  Unfortunately, it’s quite likely⁵ we’ll see Emerson’s start to disappear from many of those DB-tied establishments as well.

But while Lion bars will now be able to stock Emerson’s products, I’m not sure this is necessarily a great thing. While I look forward to choosing from a better beer selection at Lion bars, I’m concerned that one of the reasons Lion bought the Dunedin brewery was to quell the demand from their clients for craft beer.

Rumours have been doing the rounds for the past 18 months or so that Lion was actively seeking out a craft brewery to add to its range. And while I’m sure owning Emerson’s will give the company a new insight into what beer drinkers want and like – which can only be a good thing for the rest of their products – consumers have been increasing demand for craft beer. That has put pressure on bar and restaurant owners to stock independent craft products, and that demand has been passed on to Lion and DB, which own countless contracts with establishments all over the country. While DB has given in to that demand somewhat in Wellington⁶, I haven’t seen the same changes in Lion-tied establishment. Perhaps buying Emerson’s was seen as an opportunity to help quell that demand – but it completely misses the point that a lot of that demand stems from people wanting to buy tasty beer while supporting New Zealand companies. Other consumers simply want a variety of craft beers to choose from.

Change is also something most beer lovers have raised concerns about. Lion themselves have come out and said they’d be stupid to change the beers, considering their popularity. Many consumers are coming out saying they will continue to drink Emerson’s as long as the beer still tastes good. But as boundaries continue to be pushed in the New Zealand craft beer scene, the question remains whether Emerson’s will be allowed to keep up with the times.

Sometimes change is the only thing that keeps beer tasting good – Tuatara Pilsner and Tuatara IPA have never tasted better, and it’s all because the recipes have been modified to keep up with our changing palates. I’m sure Mac’s Gold tasted great at some point, and perhaps it tastes so… poor⁷ now because Lion hasn’t made changes, or the right sort of changes, to the recipe to keep it tasting good.

Emerson’s JP 2011 – a Belgian-style Tripel and absolutely divine. 

It’s taken me more than a week to write this post, and while my concerns grow the more I think about the sale of Emerson’s⁸, I, like many beer enthusiasts, plan to take a wait-and-see approach. I won’t boycott Emerson’s products as long as the quality and flavour remains. I can’t imagine going through Easter without a few bottles of Taieri George (and a few more for the cellar), nor tasting a new batch of JP each winter, nor leaving Regional Wines and Spirits without a small rigger of the new Brewer’s Reserve.

But, when given the choice at bars and restaurants, I would prefer to give my hard-earned money to independent businesses, rather than to a multi-national corporation. I don’t expect the beer to change (in the immediate future anyway), but with so much delicious New Zealand beer available these days already, we’re lucky not to have to sacrifice quality or flavour in order to support local business.

****

¹ Without a major cash injection anyway. Breweries are expensive to build and to expand, and unfortunately, beer isn’t the most lucrative business. We’re lucky there are so many people in New Zealand with a love of good beer, or we’d still be stuck with the choice of a barely-hopped lager, or a barely-hopped lager with caramel for colouring.

² The sale price hasn’t been publicly discussed, but it’s thought it would have been worth several million dollars.

³ The beer epiphany is that moment when you try a beer that makes you realise beer can be more than just a bitter-sweet liquid. Mine was Hoegaarden – a beer that is also tied to Lion, with the multi-national given the marketing and distribution rights of the product in New Zealand.

The date when the sale becomes effective.

Complete speculation here – but how happy will DB be to buy and stock beer from its biggest competition in its bars?

Southern Cross has three independent taps and a good range of bottled craft beers, the General Practitioner and the Tasting Room both have a selection of craft beer bottles, hell, even Café 162 in Karori sold the Tuatara range when I worked there three years ago, and their craft beer range has grown since.

There are several four-letter words that would perhaps be better placed here, but I’m trying to remain polite.

Will Lion change its mind in a few years time when they realise the cost of the  beers and force changes to the recipes and ingredients? Will an increase in demand mean some Emerson’s products are brewed elsewhere, ie. at Speights or The Pride, where quality could be compromised? Could significant production increases cause a strain on some of New Zealand’s beautiful ingredients – Riwaka hop shortage anyone?

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