It’s been an Australian staple for as long as Europeans have been here, but there are now fears that beer is becoming a luxury many can no longer afford.
That may sound alarmist, but it comes from someone who should know – the managing director of Coopers Brewery, Dr Tim Cooper.
The head of Australia’s largest family-owned beer company says factors such as price increases resulting from the higher cost of raw materials like barley, aluminium and tin plate, along with general cost-of-living pressures on families, have combined to make consumers think twice about how much beer – if any – they’ll buy.
“I think people do get more spooked by the economic conditions,” Dr Cooper said.
“They weigh things up a bit more now. They look at the price of beer and some are deciding, ‘I’ll buy two six packs instead of a carton’.”
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Another contributing factor is government excise increases. There’s nothing new about these increases, which are delivered twice a year in February and August. However, because they are CPI-indexed, they have been very small increases for years.
Not anymore.
With the sharp rise in inflation that excise increase is far more noticeable as it gets passed on to the consumer.
This year’s August increase was 4 per cent, the largest in more than 30 years. As a result of that and other cost factors, the retail price of a carton of beer went up in August generally by between $1 and $2.
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A dollar or two here and there may not sound like much, but replicated across other groceries it becomes quite an issue, forcing consumers into choosing between items when shopping. And as much as beer is considered an Aussie staple, it could hardly be classed as a necessity.
With consumers cutting down – or in some cases giving up completely – on beer purchases, the breweries are feeling the squeeze.
Behemoth breweries such as Japan’s Asahi and Kirin, which between them own Australia’s biggest brands, such as Victoria Bitter, Carlton Draught, Tooheys and XXXX Gold, should be well placed to deal with the downturn but it’s tougher for the smaller players, particularly the micro-breweries.
Coopers, which commands about 5 per cent of the Australian market, is by no means ‘micro’ but has still felt the effects of the downturn, with COVID, along with inflationary pressures, playing a leading role, particularly with pubs and clubs being unable to open during lockdown.
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Coopers’ profit before tax for 2021–22 was $27.3 million, compared with $36.5 million the previous year.
Dr Cooper remains upbeat, and signs of recovery are already appearing. Trading was better in the first few months of 2022–23, hospitality venues are back in full swing, and monthly keg volumes are up 59 per cent compared with the same months during lockdown.
Dr Cooper said his brewery is now budgeting for an increase in net profits for this financial year.
That’s good news for the brewery, but while inflation shows no signs of abating and cost-of-living pressure remains a factor for most, it might be a while before some Australians go back to buying a carton or a ‘slab’ as a matter of course.
Are you a regular beer drinker? Have price increases forced you to cut back on the amount you drink? Why not share your experience and thoughts in the comments section below?