Craft beer brewers take on domestic heavyweights in ACCC and WTO fair trade investigation
Australian craft brewers have asked the World Trade Organisation (WTO) to act in a dispute over fair trade for small breweries.
David Hollyoak, the chairman of the Australian Real Craft Brewers Association, has asked the WTO to take action against countries that provide subsidies to microbreweries.
"Australia is in a very unfair position because in 22 out of the 33 Organisation for Economic Cooperation and Development [OECD] countries are providing substantial reduced tax rates for their small brewers, and under the general agreement of trade and tariffs that is deemed a government subsidy," he said.
Mr Hollyoak said American microbreweries such as Sierra Nevada had been able to gain an unfair advantage in the Australian market.
"We've had quite a few members say they've lost taps at hotels or fridge space to Sierra Nevada products," he said.
The independent craft brewers said they were being squeezed from all angles.
Already the Australian Competition and Consumer Commission (ACCC) is investigating trading practices which lock craft beers out of Australian hotels.
Small brewers find it hard to get their beers on tap in pubs which have signed contracts which allow the big brewers to monopolise their taps in exchange for tens of thousands of dollars worth of rebates and equipment.
The small brewers believe this is a restraint of trade.
"This doesn't happen in other parts of the world. For example in America it is illegal to have one tap contracted," Mr Hollyoak said.
But the large brewers denied their practices were a restraint of trade.
"It's very competitive. We actually like people coming into pubs wanting choice and variety," said Jeremy Griffith from Carlton & United Breweries.
"We are seeing a lot of publicans at the moment actually demanding that we bring more craft beer taps to the consumer.
"Seventy per cent of our customers aren't contracted at all, and many of those ones that do have contracts are not completely exclusive."
Popularity of craft beers on the rise
As the craft brewers await decisions from the WTO and the ACCC, some publicans are rethinking the contracts they have struck up with the big breweries.
Ray Reilly from the Henson Park Hotel turned down a deal with Carlton & United worth more than $50,000 and said the decision had paid off.
"Big dividends. I mean just having the flexibility to do what the community really wants and that's to have a good selection of beer," Mr Reilly said.
"We can do whatever we like to do. We take a beer on, if it doesn't work we get rid of it and we put another beer on."
While total beer sales are declining in Australia, the popularity of craft beers has increased here in recent years.
At the Union Hotel in Sydney, they no longer sell Tooheys New or Victoria Bitter on tap, something that would have been unthinkable two years ago.
Nineteen of their 22 taps are now dedicated to craft beer.
"Out of the 19 taps that are craft, we might have 40 or 50 brewers a year and so far I think this year we've had 300 different beers on tap so far," said Luke Hiscox from the Union Hotel.
Richard Adamson, the head brewer at Young Henrys, said some of the reasons why consumers chose to drink craft beers over the larger brands included because they liked the flavour of the beer, the ethos of the company, and because they "want to support the small guy".
"I think what we used to see with pubs was the offering was very much supplier-led in terms of what choice people had," he said.
"It seems to be more consumer-led now. People want that choice."
