The Big Sale: Is It A Big Deal?

September 16, 2021, by James Smith
The Big Sale: Is It A Big Deal?

A week on from the beer world's sale of the century, The Crafty Pint's founder James Smith shares his thoughts.

When news broke a week ago that Stone & Wood’s founders had agreed to sell the Fermentum Group to Lion, we described it as sending shockwaves through the industry.

Elsewhere, the acquisition (subject to approvals) has been described as a bombshell, the end of an era, a devastating blow for the independent sector, and much more besides.

There’s no denying it’s the biggest story in the local beer industry for some time – at least in the part of the industry where we operate; some would argue that mantle belongs to Asahi’s purchase of CUB. And its impact is undeniably significant in many ways. But, as the dust settles, is it really as big a deal as many are suggesting?

Why It Matters

Stone & Wood's founders have taken flak for past commentary on independence and brewery sales since agreeing to sell their business to Lion.


The undisclosed sum involved will no doubt far exceed the prices paid for Balter, 4 Pines, Pirate Life, Mountain Goat and the other former indies to cross the Rubicon. Equally, the volume of beverages sold by the Fermentum Group dwarfs those being produced by the aforementioned brewers at the time of their sale.

It goes without saying that Kirin-owned Lion have significantly strengthened their hand when it comes to craft. Since buying Little Creatures and White Rabbit outright in 2012, they’ve created and bought a number of other local brands – Byron Bay Brewery, Tiny Mountain, Bevy Brewing, Eumundi Brewers, Malt Shovel Brewers – but none of those has anything like the clout of Stone & Wood’s Pacific Ale.

They’ve not just bought a brewery, either, but a portfolio that covers many drinks categories. How much more appealing will their offering look to publicans and pub chains tempted by the benefits of locked tap contracts now it’s been enhanced by Pacific Ale, Fixation, Two Birds, Sunly Seltzer and the occasional Counter Culture beer?

That some of Stone & Wood’s founders’ past commentary on independence has come back to bite them is as true as it was for the likes of Cam and Dave at Mountain Goat – and unfortunate in the case of the founders that didn’t want to sell. It not only opened them up to accusations of hypocrisy and the loudest of criticisms from the beer community, but it gave past targets of their commentary a chance to air long-held grievances.

And, of course, there are “victims” of the sale. The Independent Brewers Association (IBA), which Stone & Wood’s founders were instrumental in getting off the ground (initially as the Craft Beer Industry Association), has already suffered at the hands of COVID, with two cancelled Brewcons impacting finances. Losing its largest member, plus the winners of past Indies trophies, and, presumably, access to resources and IP previously shared with the association isn’t beneficial however you look at it.


The pandemic has seen messaging in many industries switch to a focus on local.


The cause at the heart of the IBA – the fight to get more people caring about who owns their beer and thus choosing independent – has also been dealt a body blow, arguably one more forceful than those delivered by every major sale from Mountain Goat onwards. It gets harder to see independence as anything more than a marketing mantra with every high profile acquisition by a multinational. But I’d argue the cause had already been if not damaged then certainly altered by COVID anyway.

Through the first year of the pandemic in particular, and not just in beer, the rallying cry has built up around supporting local, #keepinglocalalive, getting behind the small businesses in your neighbourhood, more than independence.

In many conversations with people in the industry over the past year or so, I’ve suggested this is a golden opportunity – a way in which the indie message can gain better cut through: let people know you’re the small, local business and, once they’re at your bar enjoying your hospitality and beers, then you can tell them your story and explain why supporting indie brewers matters to you. That’s going to be more powerful than any number of posters on walls, seals on cans, or tin tackers in bottleshops.

Then there’s the employees of the Fermentum Group who bought into the company’s ethos – including its stance on independence – and will have been knocked sideways by this. While Lion has guaranteed their jobs post sale and 80 percent of them who’d been with the company long enough to become part of the employee ownership scheme will receive a payday from the sale, no doubt many will be questioning whether they want to remain with the business. Meanwhile, others at the pointier end of the operation will be watching to see if the new parent company starts to become a hindrance to their fleet-footed ways.

But Is It A Big Deal? 

Some of the growing number of private label craft brands owned by Coles Liquor and Endeavour Drinks Group.


When it comes to the broader craft beer community, even taking into account all the above, the words of Do You Realize? come to mind. This isn’t the sun going down. The world is still spinning round.

Looking at pure numbers, you couldn’t have taken more litreage out of the indie sector with any other single sale, pushing the IBA's target of 15 percent market share further into the distance, yet the independent brewing companies that aren’t part of the Fermentum Group still have the same market share now as they did before the sale announcement. And there’s an argument to be made that Stone & Wood had already transcended the category anyway.

The situation regarding market access is more nuanced. Some taps – Stone & Wood taps in partially Asahi / CUB contracted venues, for example, and those in places where owners are devout believers in independence – will become targets for indie brewer reps on the one hand. On the other, as mentioned before, Lion’s craft portfolio is hugely strengthened, but surely they view it as beefing up their arsenal to take on the likes of high-flying CUB-owned Balter as much as or more than a means of battling the remaining indies.

And when it comes to market access, it’s not as if things were progressing well for the independent sector following the outcome of the investigation of a few years back by the ACCC, described as a toothless tiger on these pages at the time.

Focusing too much attention on the balance of power between independent beer and the Asahi- and Kirin-owned craft brands also ignores the role of the country’s major booze retailers. As we wrote recently, Coles Liquor and the Endeavour Drinks Group (recently demerged from Woolworths) are putting an ever greater focus on their own craft style brands.

Shortly after we ran that article, the latter highlighted how their own brands were in part responsible for their strong FY21 financial results, and a key part of their strategy for future growth. This week, in partnership with the IBA, Endeavour have also co-opted Bright Brewery’s can-holder recycling initiative as their own, calling it an Australian first via the technicality that it’s the first led by a retailer.

They’re both contracting well-made beers (and other drinks) from independent brewing companies to fill their fridges and shelves and, while they do state the ownership of such brands on the labels, what percentage of the beer-buying public looks that closely, or even knows what Pinnacle Drinks means?

In short, while the events of the past week certainly don’t make things easier for the owners of independent brewing companies, the challenges they face were already there and how they tackle them hasn’t altered.

Is it the end of an era as some have suggested?

For Stone & Wood, of course. Their remarkable story has reached a point many hoped it wouldn’t. As Brews News editor Matt Kirkegaard is quoted as saying in an ABC article discussing the sale: "They've pioneered so much, and there is so much good that they've done, but unfortunately, their legacy is going to be the way that they exited it and the damage that they've done."

It’s a common thread running through the myriad comment threads sparked by the sale online, but one that requires the observer to look past much else.

Past the drinkers first introduced to craftier beers by Pacific Ale in the way Little Creatures Pale converted a generation beforehand.

Past the venues persuaded to tap something other than mainstream beer by the simple fact they knew Pacific Ale would sell.

Past the people inspired to launch their own brewing companies – often wanting to do so in (using the founders’ phrase here) a conscious manner – by Stone & Wood.

Past the role Stone & Wood played in elevating awareness of Australian hops on a global scale.

Past the scores of brewers who’ve been trained through their annual brewer intake now working at other independent breweries in Australia.

Past the charities and good causes they’ve helped in the Northern Rivers region.

Past the work they have put into wider industry initiatives, such as the IBA. It's a lot to look past, and suggests their legacy will be many things to many people.

Events of the past week have shown just how sad the sale is for many, however. It’s impactful in myriad ways too. But, for all that, has it really changed anything for the owners of the hundreds of independent brewing companies across Australia?

And, if you’re one of those beer lovers for whom independence matters, what has changed for you? Even if you’re a dyed in the wool Cloud Catcher, Little Ray or Sunset Ale fan, you’re not going to struggle to find a similar offering from elsewhere to fill that hole in your life, even if it doesn’t lessen the hurt of losing a loved one.

For me, one week on from the announcement, the phrase that comes to mind when looking at the state of play now compared to a week ago is one with which travellers to Thailand will be familiar: “Same same, but different.”

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