Why Independence Matters
8 November 2019
Japan now owns approximately 90% of all the beer produced and sold in Australia...
Japan now owns approximately 90% of all the beer produced and sold in Australia. Surprising to some, irrelevant to others, but it is important, and, here, I discuss why.
My folks began their small business journey in the basement of their home, way back in 1982. In 2010 they sold that business to an American software organisation, and this is why Newstead Brewing Co exists today. Is that the sound of some stones shattering the glass walls in my house, I hear you say? Well, yes, of course it is, but it also means I have some experience, albeit as a bystander, when a successful, small Australian business losses it’s governance. You see, one of two things happen when a small to medium sized business is acquired. They are either, ever so slowly, evolved to become something they never were, or they are subsumed into the belly of the parent company. And either is absolutely fine, economics and logistics, synergy and maximising profits. That’s why we are all here, surely?
The first and most pertinent rebuke once we begin down the path of advocating independence is that “your phone isn’t independent, nor your clothes, or car, or brewery equipment” and if the product stays the same that’s all that really matters. A fine argument, although one can also consider that there is really no viable local alternative to $10 shirts from Kmart, or my Honda CRV. Australian made clothes do exist, as do Australian made bicycles, and yet either through logistics, supply or functionality, they are not comparable. Independent beer is directly comparable to its multinational big brother, in price, distribution (excluding the anti-competitive tap contract debacle in major pubs and stadiums) and execution. Independent beer is a necessity, not because it’s better or different, but because it affects how these organisations interact in their community. Independent food, clothing and transportation are also a necessity (and will become more so), and equally due your cognisance, and these industries have their own battle to war.
But rather than positing the reasons why independence is not irrelevant, let’s look at the three reasons why it is imperative.
Independence means that we are able to determine exactly what we spend time and effort on, even when that is not profitable. Most globally owned, Australia-located breweries are left to their own devices, I hear you say. And while this is true, any investment locally either demands a financial return or is simply a marketing platitude. Being independent means that we have been able to pursue loads of local investment, all run at a financial loss to Newstead Brewing Co. Even just recently, we have started The Art Series, which sees a local artist design a 500mL can. We have hosted an art show, donated stock and sold tee shirts, all on behalf of the artist, who truly deserves the investment. Every Friday in November we have donated a tap with 100% of the takings (not just “profit”) to the amazing charity Orange Sky. They are a Brisbane based charity that provide services for those affected by homelessness in Brisbane and throughout Australia. We continue to sponsor a PhD student at the University of Queensland, and partner with the Brisbane Powerhouse and Surf Life Saving Queensland. There are no financial returns from these programs, but they are so incredibly important to our local community. I do wonder sometimes if the board of Kirin would feel the same.
Independence means that we invest in our people, even to the point where there is no commercial gain. We have multiple in-house gypsy brewers who brew their own labels at cost price. Not because we need the contract, in fact we often brew their beers to the detriment of our own, but because we deem it important to share knowledge and resources with other passionate brewers. This scenario would not stand to the rigor of return on investment and yet we continue to do it, year on year.
Independence means that we stimulate the local economy through partnerships. This goes beyond our 90 employees (all Queenslanders, by the way), or the local maltster and hop grower. Of course, multinational breweries also purchase Australian malt and have an Australian delivery driver. However, because we are fiercely family orientated and owned, we actively seek out such consanguineous organisations for partnerships. Whether it’s purchasing produce from Loop Growers, a market farm at Samford, or sending our waste products to Eggcettera at Allora, we interact with like-minded, local, independent organisations. Our brownies come from Dello Mano in Fortitude Valley, mushrooms from Little Acre at West End, while our spirits are predominantly Australian, with Milton Rum and Beenleigh being our house pours, no Diageo-owned Bundaberg Rum, here. Why? Because there is a directly comparable, local alternative.
Australia lags well behind the rest of the developed world in investment in R&D. Our best products, minds and companies are seeking refuge overseas. With governments (State and Federal, conservative and progressive) that either cannot or refuse to invest in innovation and manufacturing, it has never been more essential that Australian skills and yes, even money, stays in Australia. Exacerbating this situation, is the extant economic downturn that has all the hallmarks of a global recession. Local breweries, who do not boast the coffers or tap contracts of international stepparents, will find the next five years difficult, through no fault of their own. And they need your help. Of course, you have a choice and I urge you to make it with all the knowledge of its consequences. For these partnerships, these community investments will cease to exist without Independent Breweries.
Dr Mark Howes, CEO
Newstead Brewing Co